Cohen & Co Inc. 10-Q

cohn20220331_10q.htm     Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549      FORM 10-Q   ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   For the quarterly period ended March 31, 2022   or   ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   For the transition period from                      to                        Commission File Number: 001-32026     COHEN & COMPANY INC. (Exact name of registrant as specified in its charter)   Maryland 16-1685692 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)    Cira Centre 2929 Arch Street, Suite 1703 Philadelphia , Pennsylvania 19104 (Address of principal executive offices) (Zip Code)   Registrant’s telephone number, including area code: ( 215 )  701-9555   Not applicable   (Former name, former address and former fiscal year, if changed since last report)     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ☒     Yes     ☐  No   Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted  pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    ☒   Yes     ☐  No   Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.        Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐   Smaller reporting company ☒    Emerging growth company ☐   If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐   Indicate by check mark whether the Registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).     ☐   Yes    ☒  No   Securities registered pursuant to Section 12(b) of the Act:   Title of each class   Trading Symbol(s)   Name of each exchange on which registered Common Stock, par value $0.01 per share   COHN   The NYSE American Stock Exchange   As of May 2, 2022, there were 1,718,135   shares of common stock ($0.01 par value per share) of Cohen & Company, Inc. ("Common Stock") outstanding.   Table of Contents         Cohen & Company Inc.   FORM 10-Q INDEX TO QUARTERLY REPORT ON FORM 10-Q March 31, 2022             Page   PART I. FINANCIAL INFORMATION        Item 1. Financial Statements (Unaudited) 5        Consolidated Balance Sheets—March 31, 2022 and December 31, 2021 5        Consolidated Statements of Operations and Comprehensive Income (Loss)—Three Months Ended March 31, 2022 and 2021 6        Consolidated Statements of Changes in Equity—Three Months Ended March 31, 2022 and 2021 7        Consolidated Statements of Cash Flows—Three Months Ended March 31, 2022 and 2021 9        Notes to Consolidated Financial Statements (Unaudited) 10      Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 58      Item 3. Quantitative and Qualitative Disclosures about Market Risk 81      Item 4. Controls and Procedures 82    Part II. OTHER INFORMATION        Item 1. Legal Proceedings 83      Item 1A. Risk Factors 83      Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 84      Item 6. Exhibits 85    Signatures 86   2 Table of Contents       Forward-Looking Statements     This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue,” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, level of activity, performance, or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.   These forward-looking statements are found at various places throughout this Quarterly Report on Form 10-Q and include information concerning possible or assumed future results of our operations, including statements about the following subjects:     ● integration of operations;   ● business strategies;   ● growth opportunities;   ● competitive position;   ● market outlook;   ● expected financial position;   ● expected results of operations;   ● future cash flows;   ● financing plans;   ● plans and objectives of management;   ● tax treatment of the business combinations;   ● the special purpose acquisition companies (SPACs) of which we are a sponsor including, INSU Acquisition III, a blank check company that will seek to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses;   ● our investments in both SPACs and SPAC sponsor entities, including through our SPAC Fund and SPAC Series Funds   ● our role as asset manager and sponsor in our SPAC franchise   ● fair value of assets; and   ● any other statements regarding future growth, future cash needs, future operations, business plans, future financial results, and any other statements that are not historical facts.   These forward-looking statements represent our intentions, plans, expectations, assumptions, and beliefs about future events and are subject to risks, uncertainties, and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties, and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You should consider the areas of risk and uncertainty described above and discussed under “Item 1A — Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Actual results may differ materially because of various factors, some of which are outside our control, including the following:     ● a decline in general economic conditions or the global financial markets;   ● continuation of the COVID-19 pandemic or future outbreaks of COVID-19, the timing and effectiveness of vaccine distribution, and uncertainty surrounding the length and severity of future impacts on the global economy and on our business, liquidity, results of operations and financial condition;   ● economic uncertainty and capital markets disruption which have been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine;   ● risks and liabilities due to our investments in the equity interests of SPACs and SPAC sponsor entities including the risk of increased regulation applicable to SPACs, risks regarding litigation in connection with the SPACs in which we invest and those which we sponsor, uncertainty of whether the SPACs in which we invest and those we sponsor will consummate a business combination, adverse impacts of COVID-19 on our SPAC franchise, significant competition for business opportunities in the SPAC industry, write-downs or write-offs with respect to the securities which we hold subsequent to the consummation of an initial business combination by the SPACs in which we invest and those which we sponsor, and the target of a SPAC being an early-stage and financially unstable company;   ● losses caused by financial or other problems experienced by third parties;   ● losses due to unidentified or unanticipated risks;   ● losses (whether realized or unrealized) on our principal investments;   ● a lack of liquidity, i.e., ready access to funds for use in our businesses; or the availability of financing at prohibitive rates;   ● the ability to attract and retain personnel;   ● the ability to meet regulatory capital requirements administered by federal agencies;   ● the ability to pay dividends   ● an inability to generate incremental income from acquired, newly established or expanded businesses;   ● unanticipated market closures due to inclement weather or other disasters;   ● the volume of trading in securities including collateralized securities transactions;   ● the liquidity in capital markets;   ● the creditworthiness of our correspondents, trading counterparties, and banking and margin customers;   ● changing interest rates and their impacts on U.S. residential mortgage volumes;   ● competitive conditions in each of our business segments;   ● the availability of borrowings under credit lines, credit agreements, warehouse agreements, and our credit facilities;   ● the potential misconduct or errors by our employees or by entities with whom we conduct business; and   ● the potential for litigation and other regulatory liability.   3 Table of Contents   Our Internet website is www.cohenandcompany.com and we make available on our website: our filings with the Securities and Exchange Commission (“SEC”), including annual reports, quarterly reports, current reports and any amendments to those filings. The reference to our website address does not constitute incorporation by reference of the information contained therein into this Form 10-Q. We also use our website to disseminate other material information to our investors (on the Home Page and in the “Investor Relations” section). Among other things, we post on our website our press releases and information about our public conference calls (including the scheduled dates, times and the methods by which investors and others can listen to those calls), and we make available for replay webcasts of those calls and other presentations for a limited time.   You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements concerning other matters addressed in this Quarterly Report on Form 10-Q and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Quarterly Report on Form 10-Q. Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances, or assumptions underlying such statements, or otherwise.   Certain Terms Used in this Quarterly Report on Form 10-Q     In this Quarterly Report on Form 10-Q, unless otherwise noted or as the context otherwise requires, the “Company,” “we,” “us,” and “our” refer to Cohen & Company Inc. (formerly Institutional Financial Markets, Inc.), a Maryland corporation, and its subsidiaries on a consolidated basis; and “Cohen & Company, LLC” (formerly IFMI, LLC) or the “Operating LLC” refer to the main operating subsidiary of the Company.    “ JVB Holdings ” refers to JVB Financial Holdings, L.P., a wholly owned subsidiary of the Operating LLC; “ JVB ” refers to J.V.B. Financial Group, LLC, a wholly owned broker-dealer subsidiary of JVB Holdings; "CCFESA" refers to Cohen & Company Financial Europe Limited S.A., a majority owned subsidiary regulated by the Autorite de Controle Prudentiel et de Resolution ("ACPR") in France; “ CCFEL ” refers to Cohen & Company Financial (Europe) Limited, a wholly owned subsidiary of the Operating LLC regulated by the Central Bank of Ireland ( the “CBI”).   “ Securities Act ” refers to the Securities Act of 1933, as amended; and “ Exchange Act ” refers to the Securities Exchange Act of 1934, as amended.   4 Table of Contents       PART I. FINANCIAL INFORMATION     ITEM 1. FINANCIAL STATEMENTS.   COHEN & COMPANY INC.   CONSOLIDATED BALANCE SHEETS   (Dollars in Thousands)        March 31, 2022               (unaudited)     December 31, 2021   Assets                 Cash and cash equivalents   $ 62,510     $ 50,567   Receivables from brokers, dealers, and clearing agencies     102,049       68,392   Due from related parties     1,705       4,581   Other receivables     5,439       3,203   Investments-trading     248,721       223,865   Other investments, at fair value     49,599       56,033   Receivables under resale agreements     2,193,562       3,175,645   Investments in equity method affiliates     17,714       48,238   Deferred income taxes     10,049       11,513   Goodwill     109       109   Right-of-use asset - operating leases     11,087       10,273   Other assets     4,188       3,885   Total assets   $ 2,706,732     $ 3,656,304                     Liabilities                 Payables to brokers, dealers, and clearing agencies   $ 158,172     $ 160,896   Accounts payable and other liabilities     50,590       22,819   Accrued compensation     11,109       22,577   Trading securities sold, not yet purchased     128,480       62,512   Other investments sold, not yet purchased     208       2,488   Securities sold under agreements to repurchase     2,188,415       3,171,415   Lease liability - operating leases     11,725       10,813   Redeemable financial instruments     7,957       7,957   Debt     28,598       43,394   Total liabilities     2,585,254       3,504,871                     Commitments and contingencies (See note 20)                                       Stockholders' Equity:                 Voting Non-Convertible Preferred Stock, $0.001 par value per share, 50,000,000 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, 1,718,135 and 1,697,443 shares issued and outstanding, respectively, including 291,279 and 366,293 unvested or restricted share awards, respectively     17       17   Additional paid-in capital     71,980       72,006   Accumulated other comprehensive loss     ( 920 )     ( 905 ) Accumulated deficit     ( 18,297 )     ( 9,204 ) Total stockholders' equity     52,807       61,941   Non-controlling interest     68,671       89,492   Total equity     121,478       151,433   Total liabilities and equity   $ 2,706,732     $ 3,656,304   (     See accompanying notes to unaudited consolidated financial statements.   5 Table of Contents       COHEN & COMPANY INC.     CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Dollars in Thousands, except share or per share information) (Unaudited)       Three Months Ended March 31,       2022     2021   Revenues                 Net trading   $ 12,022     $ 19,183   Asset management     1,889       2,093   New issue and advisory     3,770       1,839   Principal transactions and other income (loss)     ( 18,363 )     79,561   Total revenues     ( 682 )     102,676                     Operating expenses                 Compensation and benefits     13,879       26,647   Business development, occupancy, equipment     1,248       719   Subscriptions, clearing, and execution     1,941       2,790   Professional fee and other operating     1,996       1,994   Depreciation and amortization     132       81   Total operating expenses     19,196       32,231                     Operating income (loss)     ( 19,878 )     70,445                     Non-operating income (expense)                 Interest expense, net     ( 1,351 )     ( 2,014 ) Income (loss) from equity method affiliates     ( 12,104 )     ( 835 ) Income (loss) before income tax expense (benefit)     ( 33,333 )     67,596   Income tax expense (benefit)     1,833       868   Net income (loss)     ( 35,166 )     66,728   Less: Net income (loss) attributable to the non-convertible non-controlling interest of the Operating LLC     ( 14,704 )     29,970   Enterprise net income (loss)     ( 20,462 )     36,758   Less: Net income (loss) attributable to the convertible non-controlling interest of Cohen & Company Inc.     ( 12,850 )     27,403   Net income (loss) attributable to Cohen & Company Inc.   $ ( 7,612 )   $ 9,355   Income (loss) per share data (see note 19)                 Income (loss) per common share-basic:                 Basic income (loss) per common share   $ ( 5.46 )   $ 9.04   Weighted average shares outstanding-basic     1,394,954       1,034,287   Income (loss) per common share-diluted:                 Diluted income (loss) per common share   $ ( 5.46 )   $ 6.98   Weighted average shares outstanding-diluted     1,394,954       5,053,562                     Dividends declared per common share   $ 1.00     $ -                     Comprehensive income (loss)                 Net income (loss)   $ ( 35,166 )   $ 66,728   Other comprehensive income (loss) item:                 Foreign currency translation adjustments, net of tax of $0     ( 66 )     ( 231 ) Other comprehensive income (loss), net of tax of $0     ( 66 )     ( 231 ) Comprehensive income (loss)     ( 35,232 )     66,497   Less: comprehensive income (loss) attributable to the non-controlling interest     ( 27,601 )     57,212   Comprehensive income (loss) attributable to Cohen & Company Inc.   $ ( 7,631 )   $ 9,285       See accompanying notes to unaudited consolidated financial statements.   6 Table of Contents     COHEN & COMPANY INC.   CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Dollars in Thousands, except share or per share information) (Unaudited)       Cohen & Company Inc.                       Three Months Ended March 31, 2022                                               Retained     Accumulated                                               Additional     Earnings     Other     Total                       Preferred Stock     Common Stock     Paid-In Capital     (Accumulated Deficit)     Comprehensive Income (Loss)     Stockholders' Equity     Non-controlling Interest     Total Equity   December 31, 2021   $ 27     $ 17     $ 72,006     $ ( 9,204 )   $ ( 905 )   $ 61,941     $ 89,492     $ 151,433   Net (loss)     -       -       -       ( 7,612 )     -       ( 7,612 )     ( 27,554 )     ( 35,166 ) Other comprehensive (loss)     -       -       -       -       ( 19 )     ( 19 )     ( 47 )     ( 66 ) Acquisition / (surrender) of additional units of consolidated subsidiary, net     -       -       ( 292 )     -       4       ( 288 )     288       -   Equity-based compensation     -       -       338       -       -       338       766       1,104   Shares withheld for employee taxes     -       -       ( 72 )     -       -       ( 72 )     ( 145 )     ( 217 ) Dividends/distributions to convertible non-controlling interest     -       -       -       ( 1,481 )     -       ( 1,481 )     ( 3,475 )     ( 4,956 ) Convertible non-controlling interest investment     -             -       -       -       -       15,000       15,000   Non-convertible non-controlling interest investment     -       -       -       -       -       -       6       6   Non-convertible non-controlling interest distributions     -       -       -       -       -       -       ( 5,660 )     ( 5,660 ) March 31, 2022   $ 27     $ 17     $ 71,980     $ ( 18,297 )   $ ( 920 )   $ 52,807     $ 68,671     $ 121,478     7 Table of Contents       Cohen & Company Inc.                       Three Months Ended March 31, 2021                                               Retained     Accumulated                                               Additional     Earnings     Other     Total                       Preferred Stock     Common Stock     Paid-In Capital     (Accumulated Deficit)     Comprehensive Income (Loss)     Stockholders' Equity     Non-controlling Interest     Total Equity   December 31, 2020   $ 27     $ 13     $ 65,031     $ ( 20,341 )   $ ( 821 )   $ 43,909     $ 57,528     $ 101,437   Net income     -       -       -       9,355       -       9,355       57,373       66,728   Other comprehensive loss     -       -       -       -       ( 70 )     ( 70 )     ( 161 )     ( 231 ) Acquisition / (surrender) of additional units of consolidated subsidiary, net     -       -       926       -       4       930       ( 930 )     -   Equity-based compensation and vesting of shares     -       -       153       -       -       153       13,488       13,641   Shares withheld for employee taxes     -       -       ( 97 )     -       -       ( 97 )     ( 264 )     ( 361 ) Purchase and retirement of Common Stock                 ( 662 )                 ( 662 )     -       ( 662 ) Dividends/distributions to convertible non-controlling interest     -       -       -       ( 7 )     -       ( 7 )     ( 11 )     ( 18 ) Non-convertible non-controlling interest investment     -       -       -       -       -       -       23       23   Non-convertible non-controlling interest distributions     -       -       -       -       -       -       ( 25,885 )     ( 25,885 ) March 31, 2021   $ 27     $ 13     $ 65,351     $ ( 10,993 )   $ ( 887 )   $ 53,511     $ 101,161     $ 154,672                  See accompanying notes to unaudited consolidated financial statements.   8 Table of Contents         COHEN & COMPANY INC.     Consolidated Statements of Cash Flows (Dollars in Thousands) (Unaudited)       Three Months Ended March 31,       2022     2021   Operating activities                 Net income (loss)   $ ( 35,166 )   $ 66,728   Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:                 Equity-based compensation     1,104       13,641   Accretion of income on other investments, at fair value     -       ( 3,000 ) Loss (gain) on other investments, at fair value     18,718       ( 79,189 ) Loss / (gain) on other investments, sold not yet purchased     ( 178 )     ( 62 ) (Income) / loss from equity method affiliates     12,104       835   Depreciation and amortization     132       81   Amortization of discount on debt     204       206   Deferred tax provision (benefit)     1,464       619   Change in operating assets and liabilities, net:                 Change in receivables from / payables to brokers, dealers, and clearing agencies     ( 36,381 )     23,497   Change in receivables from / payables to related parties, net     2,876       106   (Increase) decrease in other receivables     ( 2,236 )     ( 1,807 ) (Increase) decrease in investments-trading     ( 24,856 )     ( 41,353 ) (Increase) decrease in receivables under resale agreement     982,083       ( 1,583,195 ) (Increase) decrease in other assets     ( 951 )     ( 47 ) Increase (decrease) in accounts payable and other liabilities     23,933       ( 12,381 ) Increase (decrease) in accrued compensation     ( 11,468 )     ( 3,180 ) Increase (decrease) in trading securities sold, not yet purchased     65,968       14,288   Increase (decrease) in securities sold under agreement to repurchase     ( 983,000 )     1,576,063   Net cash provided by (used in) operating activities     14,350       ( 28,150 ) Investing activities                 Purchase of other investments, at fair value     ( 3,869 )     ( 35,279 ) Purchase of investments - other investments sold, not yet purchased, at fair value     ( 4,178 )     ( 4,442 ) Sales and returns of principal-other investments, at fair value     7,395       46,740   Sales and returns of principal - other investments sold, not yet purchased, at fair value     1,239       4,398   Investment in equity method affiliate     ( 438 )     ( 268 ) Purchase of furniture, equipment, and leasehold improvements     ( 298 )     ( 190 ) Net cash provided by (used in) investing activities     ( 149 )     10,959   Financing activities                 Proceeds from debt     2,250       -   Repayment of debt     ( 2,250 )     -   Repayments of redeemable financial instruments     -       ( 4,000 ) Cash used to net share settle equity awards     ( 217 )     ( 361 ) Purchase and retirement of Common Stock     -       ( 662 ) Cohen & Company Inc. dividends     ( 54 )     ( 7 ) Convertible non-controlling interest distributions     ( 142 )     ( 138 ) Non-convertible non-controlling interest investment     6       23   Non-convertible non-controlling interest distributions     ( 1,775 )     -   Net cash provided by (used in) financing activities     ( 2,182 )     ( 5,145 ) Effect of exchange rate on cash     ( 76 )     ( 189 ) Net increase (decrease) in cash and cash equivalents     11,943       ( 22,525 ) Cash and cash equivalents, beginning of period     50,567       41,996   Cash and cash equivalents, end of period   $ 62,510     $ 19,471          See accompanying notes to unaudited consolidated financial statements.   9 Table of Contents   COHEN & COMPANY INC.   Notes to Consolidated Financial Statements (Dollars in Thousands, except share and per share information)   (Unaudited)        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.   The Company     The Company is a financial services company specializing in fixed income and SPAC markets. As of March 31, 2022 , th e Company had $ 2.27  billion in assets under management (“AUM”) of which 51.8 % or $ 1.17 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; "CCFESA" refers to Cohen & Company Financial Europe Limited S.A., a majority owned subsidiary regulated by the Autorite de Controle Prudentiel et de Resolution ("ACPR ") in France. “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 formerly regulated by the Central Bank of Ireland in Ireland.   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, 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 CCFESA in Europe.  A division of JVB, Cohen & Company Capital Markets is the Company's full-service boutique investment banking platform focusing on SPAC advisory, capital markets advisory, and M&A advisory, with clients primarily in the financial technology (commonly referred to as "fintech") and SPAC spaces.     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.   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; other investments sold, not yet purchased; and investments in equity method affiliates in the Company’s consolidated balance sheets.   10 Table of Contents   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 and other investments sold, not yet purchased; and   ●  Income and loss earned on equity method investments.     2. BASIS OF PRESENTATION   The financial statements of the Company included herein were prepared in conformity with U.S. GAAP for interim financial information and with the instructions to Form 10 -Q and Article 10 of Regulation S- X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair presentation of results for the interim month periods. All intercompany accounts and transactions have been eliminated in consolidation. The results for the three months ended March 31, 2022 and 2021 are not necessarily indicative of the results for the entire year or any subsequent interim period. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10 -K for the year ended December 31, 2021 .   Capitalized terms used herein without definition have the meanings ascribed to them in the Annual Report on Form 10 -K for the year ended December 31, 2021 .     CORRECTION OF AN IMMATERIAL ERROR IN PREVIOUSLY ISSUED FINANCIAL STATEMENTS   During the three months ended March 31, 2022, the Company determined that it had made an error when calculating its December 31, 2021, deferred tax asset and current tax payable related to its net operating loss carryforwards in certain local jurisdictions.  Accordingly, the Company recorded an adjustment in that period and revised the December 31, 2021 balances presented herein.  The below table shows the line items impacted and compares the amounts as previously stated to the revised amounts included in this report.     The balance sheet amounts shown below are as of December 31, 2021.  The income statement amounts are for the year ended December 31, 2021.     Balance Sheet     As Stated       Revised       Change   Deferred income taxes   $ 9,468     $ 11,513     $ 2,045   Accounts payable and other liabilities     22,701       22,819       118   Accumulated deficit     ( 9,730 )     ( 9,204 )     526   Non-controlling interest   $ 88,091     $ 89,492     $ 1,401                             Income Statement                         Income tax expense (benefit)   $ ( 1,614 )   $ ( 3,541 )   $ ( 1,927 ) Net Income (loss)     72,111       74,038       1,927   Net Income attributable to non-controlling interests     60,829       62,230       1,401   Net income (loss) attributable to Cohen & Company, Inc.   $ 11,282     $ 11,808     $ 526                             Basic Earnings Per Share   $ 9.50     $ 9.95     $ 0.45   Diluted Earnings Per Share   $ 7.48     $ 7.83     $ 0.35   11 Table of Contents   3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   A. Adoption of New Accounting Standards   In December 2019, the FASB issued ASU 2019 - 12, Income Taxes (Topic 740 ):  Simplifying the Accounting for Income Taxes. This ASU is intended to simplify accounting for income taxes. It removes specific exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application.  The Company’s adoption of the provisions of ASU 2019 - 12, effective January 1, 2021, did not have an effect on the Company’s consolidated financial statements.   In January 2020, the FASB issued ASU 2020 - 01, Investments—Equity Securities (Topic 321 ), Investments—Equity Method and Joint Ventures (Topic 323 ), and Derivatives and Hedging (Topic 815 )—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 .  This ASU clarifies certain accounting 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. The Company’s adoption of the provisions of ASU 2020 - 01, effective January 1, 2021, 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.  Certain aspects of this topic were later enhanced and clarified in January 2021 when the FASB issued ASU 2021 - 01 Reference Rate Reform (Topic 848 ).   These ASUs 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.  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.   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 each reporting period. The Company’s adoption of the provisions of ASU 2020 - 08, effective January 1, 2022, did not have an effect on the Company’s consolidated financial statements.   In October 2020, the FASB issued 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 Company’s adoption of the provisions of ASU 2020 - 10, effective January 1, 2022, did not have an effect on the Company’s consolidated financial statements.   In May 2021, the FASB issued 2021 - 04, Earnings Per Share (Topic 260 ), Debt—Modifications and Extinguishments (Subtopic 470 - 50 ), Compensation (Topic 718 ), and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815 - 40 ):  Issuer's Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This ASU provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another topic. It specifically addresses: ( 1 ) how an entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange; ( 2 ) how an entity should measure the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange; and ( 3 ) how an entity should recognize the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange. The Company’s adoption of the provisions of ASU 2021 - 04, effective January 1, 2022, did not have an effect on the Company’s consolidated financial statements.    In October 2021, the FASB issued ASU 2021 - 08, Business Combinations (Topic 805 ): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.  This ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. The Company’s adoption of the provisions of ASU 2021 - 08, effective January 1, 2022, did not have an effect on the Company’s consolidated financial statements.    In October 2021, the FASB issued ASU 2021 - 10,   Government Assistance (Topic 832 ): Disclosures by Business Entities about Government Assistance.  This ASU includes amendments that are expected to increase transparency in financial reporting by requiring business entities to disclose information about certain types of government assistance they receive. The amendments require the following annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy to other accounting guidance:  (i) information about the nature of the transactions and the related accounting policy used to account for the transactions; (ii) the line items on the balance sheet and income statement that are affected by the transactions, and the amounts applicable to each financial statement line item; and (iii) significant terms and conditions of the transactions, including commitments and contingencies. The Company’s adoption of the provisions of ASU 2021 - 10, effective January 1, 2022, did not have an effect on the Company’s consolidated financial statements.    B. Recent Accounting Developments     In August  2020, the FASB issued ASU 2020 - 06,   Debt—Debt with Conversion and Other Options (Subtopic 470 - 20 ) and Derivatives and Hedging—Contracts 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 March  2022, the FASB issued ASU  2022 - 02,   Financial Instruments—Credit Losses (Topic 326 ): Troubled Debt Restructurings ("TDRs") and Vintage Disclosures.  The amendments in this ASU eliminate TDR recognition and measurement guidance and instead, require that an entity evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an existing loan.  The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. This ASU   is effective for fiscal years beginning after December 15, 2022, 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.      12 Table of Contents   C. 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 8 for a discussion of the valuation hierarchy with respect to investments-trading; other investments, at fair value; other investments sold, not yet purchased; and derivatives held by the Company.      Cash and cash equivalents : Cash and cash equivalents are 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.   Other investments 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 broker market quotations, or valuation models when quotations are not available.   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.   Securities sold under agreements to repurchase : The liabilities for securities sold under agreements to repurchase are carried at their contracted repurchase price, have short-term maturities, and are repriced frequently or bear market interest rates and accordingly, these contracts are carried at amounts that approximate fair value. The estimated fair value measurements of securities sold under agreements 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 and deferred financing costs. However, a substantial portion of the debt was assumed in the AFN Merger and recorded at fair value as of that date. As of March 31, 2022  and December 31, 2021 , the fair value of the Company’s debt was estimated to be $ 35,473 and $ 54,284 , 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 value 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; other investments, at fair value; and other investments, sold not yet purchased. 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.     13 Table of Contents     4. OTHER RECENT BUSINESS TRANSACTIONS OR EVENTS     Conversion of the 2017 Convertible Note   On March 10, 2017, the Operating LLC issued to DGC Family Fintech Trust (the “DGC Trust”), a trust established by Daniel G. Cohen, a convertible senior secured promissory note in the aggregate principal amount of $ 15,000 (the "2017 Convertible Note").  On March 20, 2022, the DGC Trust elected to convert the 2017 Convertible Note into an aggregate of 10,344,827 units of membership interests in the Operating LLC at the conversion rate specified in the 2017 Convertible Note agreement of $ 1.45 per unit. As a result of such conversion, the 2017 Convertible Note was cancelled in its entirety.  These units of membership interests have the same conversion and redemption rights as the existing convertible non-controlling interest units of membership interests.  See note 21 to the Company's December 31, 2021 Annual Report filed on Form 10 -K for additional information regarding the 2017 Convertible Note.     Pursuant to the DGC Trust’s governing documents, Daniel G. Cohen has the ability to acquire at any time any of the DGC Trust’s assets, including the units of membership interest, by substituting other property of an equivalent value without the approval or consent of any person, including any trustee or beneficiary of the DGC Trust. see Notes 16  and 23.   The 2020  Senior Note s   On January 31, 2022, the Operating LLC and JKD Investor entered into a Note Purchase Agreement.  On  January 31, 2020,  the Operating LLC entered into a Note Purchase Agreement (the “Original Purchase Agreement”) with JKD Capital Partners I LTD, a New York corporation (“JKD Investor”), and RN Capital Solutions LLC, a Delaware limited liability company (“RNCS”).  The JKD Investor is owned by Jack DiMaio, Jr., the vice chairman of the Company’s board of directors and the Operating LLC’s board of managers, and his spouse.  The note purchased by the JKD Investor is herein referred to as the “JKD Note.”     Pursuant to the Original Purchase Agreement, JKD Investor and RNCS each purchased a senior promissory note in the principal amount of $ 2,250  (for an aggregate investment of $ 4,500 ).  The senior promissory notes bore interest at a fixed rate of  12% per annum and matured on  January 31, 2022., pursuant to which, among other things, on such date, (i) JKD Investor paid to the Operating LLC an additional $ 2,250  and (ii) in consideration for such funds, the Operating LLC issued to JKD Investor an Amended and Restated Senior Promissory Note in the aggregate principal amount of $ 4,500  (the “Amended and Restated Note”), which Amended and Restated Note amended and restated the JKD Note in its entirety.  The 2022 Purchase Agreement contains customary representations and warranties on the part of each of JKD Investor and the Operating LLC.  The Company used these proceeds to retire $ 2,250 of existing 2020 Senior Notes held by RNCS.  See note 16.     New   Commercial Real Estate Opportunities ( “ CREO ” ) JV   On September 3, 2021, the Company committed to invest up to $ 15,000 of equity in a newly formed joint venture (the “CREO JV”) with an outside investor who committed to invest approximately $ 435,000  of equity in the CREO JV.  The Company is required to invest 7.5 % of the total equity of the CREO JV with an absolute limit of $ 15,000 . The CREO JV is managed by the Company.   The CREO JV was formed for the purposes of investing in primarily multi-family commercial real estate mortgage-backed loans and below-investment-grade rated tranches in CRE CLOs collateralized by mostly transitional commercial real estate mortgage-backed loans. “CRE CLO” means any pooling of commercial real estate mortgage-backed loans into a collateralized loan obligation.   The commercial real estate loans that will be funded by the CREO JV  may be originated by the Company and the Company may earn origination fees in connection with such transactions. In addition, the Company may earn structuring fees in connection with structuring and consummating a CRE CLO consisting of a pooling of commercial real estate loans. The Company also may earn management fees as manager of any CRE CLOs based on the value of the assets consolidated into a CRE CLO (calculated in accordance with the terms of such CRE CLO), payable from the proceeds generated by and in accordance with the distribution waterfall of such CRE CLO.   The Company has elected the fair value option in accordance with the provisions of FASB ASC 820,   Fair Value Measurements  (“FASB ASC 820” ) to account for its investment in the CREO JV.  The investment is included in other investments at fair value, on the consolidated balance sheet and gains and losses (both realized and unrealized) are recognized in the consolidated statement of operations as a component of principal transactions and other income.  Because the CREO JV has the attributes of investment companies as described in FASB ASC 946 - 15 - 2, the Company estimates the fair value of its investment using the net asset value (“NAV”) per share (or its equivalent) as of the reporting date in accordance with the “practical expedient” provisions related to investments in certain entities that calculate net asset value per share (or its equivalent) included in FASB ASC 820 for all entities. As of March 31, 2022, the Company's investment balance in the CREO was $ 6,617 .   Wind Down of the Company's GCF Repo Business   Since 2017, the Company has carried out a matched book GCF repo business as a full netting member of the FICC Government Services Division.  In October 2021, primarily due to reduced spreads in the repo market for GCF collateral, the Company decided to wind down this business.  As of December 31, 2021, the wind down was completed and the GCF reverse repurchase agreements and repurchase agreements balances were reduced to zero. See note 10.     14 Table of Contents   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”). The Insurance SPAC III Sponsor Entities are sponsors of INSU Acquisition Corp. III ("Insurance SPAC III"). On December 22 2020, Insurance SPAC 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 Insurance SPAC III's Class A common stock, par value $ 0.0001 per share (“Insurance SPAC III Common Stock”), and one - third of one Insurance SPAC III warrant (each, an “Insurance SPAC III Warrant”), wher e 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 Insurance SPAC III 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 placement units in Insurance SPAC III 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 the 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 the 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 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 Insurance SPAC III’s public shares issued in the IPO if the 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 in Insurance SPAC III.  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 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 founder 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 Insurance SPAC III’s founder shares currently allocated to the Operating LLC is 4,267,500 , 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 $ 1,500  to cover operating and acquisition related expenses following the IPO, of which $ 810  was borrowed by Insurance SPAC III as of   March 31, 2022 . In April 2022, the Operating LLC advanced an additional $ 150 to Insurance SPAC III. See note 23.   These loans will bear no interest and, if Insurance SPAC III consummates a business combination in the required timeframe, 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 timeframe, no funds from Insurance SPAC III's trust account can be used to repay the loans.    As of  March 31, 2022 , the Company had a total equity method investment in Insurance SPAC III of $ 3,954 , which was included as a component of investment in equity method affiliates in its consolidated balance sheet.  Partially offsetting this amount was non-controlling interest of $ 4,511 , 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 III (excluding its advances under its loan agreement) was $( 557 ) as of March 31, 2022 .       15 Table of Contents   5. NET TRADING      Net trading consisted of the following in the periods presented.  NET TRADING (Dollars in Thousands)       Three Months Ended       March 31,     March 31,       2022     2021   Net realized gains (losses) - trading inventory   $ 4,615     $ 17,899   Net unrealized gains (losses) - trading inventory     ( 3,263 )     ( 11,554 ) Net gains and losses     1,352       6,345                     Interest income- trading inventory     1,091       1,756   Interest income-receivables under resale agreements     19,010       23,449   Interest income     20,101       25,205                     Interest expense-securities sold under agreements to repurchase     ( 9,238 )     ( 12,176 ) Interest expense-margin payable     ( 193 )     ( 191 ) Interest expense     ( 9,431 )     ( 12,367 )                   Net trading   $ 12,022     $ 19,183      Trading inventory includes investments classified as investments-trading as well as trading securities sold, not yet purchased.  See note 7.  Also, see note 10 for discussion of receivables under resale agreements and securities sold under agreements to repurchase.  See note 6 for discussion of margin payable.      16 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)       March 31, 2022     December 31, 2021   Deposits with clearing agencies   $ 250     $ 250   Unsettled regular way trades, net     6,740       2,827   Receivables from clearing agencies     95,059       65,315   Receivables from brokers, dealers, and clearing agencies   $ 102,049     $ 68,392     Amounts payable to brokers, dealers, and clearing agencies consisted of the following.  PAYABLES TO BROKERS, DEALERS, AND CLEARING AGENCIES (Dollars in Thousands)       March 31, 2022     December 31, 2021   Margin payable   $ 158,172     $ 160,896   Payables to brokers, dealers, and clearing agencies   $ 158,172     $ 160,896    Deposits with clearing agencies 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.    Receivables from clearing agencies are primarily comprised of cash received by the Company upon execution of short trades that is restricted from withdrawal by the clearing agent.   Margin payable represents amounts borrowed from Pershing, LLC and Cantor Fitzgerald to finance the Company’s trading portfolio. See note 5 for interest expense incurred on margin payable.  All of the Company's securities included in investments-trading and a portion of the Company's securities included in other investments, at fair value serve as collateral for this margin loan.  See note 7.      17 Table of Contents     7. FINANCIAL INSTRUMENTS   Investments—Trading   Investments-trading consisted of the following.   INVESTMENTS - TRADING (Dollars in Thousands)       March 31, 2022     December 31, 2021   U.S. government agency MBS and CMOs   $ 118,183     $ 134,093   U.S. government agency debt securities     30,793       22,373   RMBS     8       9   U.S. Treasury securities     11,595       -   ABS     1       1   Corporate bonds and redeemable preferred stock     48,132       45,519   Foreign government bonds     397       467   Municipal bonds     5,875       18,841   Certificates of deposit     -       169   Derivatives     33,315       1,275   Equity securities     422       1,118   Investments-trading   $ 248,721     $ 223,865      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)       March 31, 2022     December 31, 2021   U.S. government agency debt securities   $ 1     $ 1   U.S. Treasury securities     35,009       29,513   Corporate bonds and redeemable preferred stock     60,771       32,574   Derivatives     32,700       424   Trading securities sold, not yet purchased   $ 128,481     $ 62,512     The Company manages its exposure to changes in interest rates for the interest rate sensitive securities it holds by entering into offsetting short positions for similar fixed rate securities. See note 5 for realized and unrealized gains recognized on investments-trading.   18 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)       March 31, 2022     December 31, 2021   Equity securities   $ 15,437     $ 24,733   Restricted equity securities     22,913       19,449   Corporate bonds and redeemable preferred stock     476       476   CREO     6,617       5,830   U.S. Insurance JV     3,529       3,450   SPAC Fund     515       1,980   Residential loans     112       115   Other investments, at fair value   $ 49,599     $ 56,033    A total of $ 14,617  and $ 15,563  of the amounts shown as other investments, at fair value above serve as collateral for the Company's margin loan payable for the as of March 31, 2022 and December 31, 2021, respectively.  See note 6.        Other investments, sold not yet purchased   Other investments, sold not yet purchased consisted of the following.   OTHER INVESTMENTS SOLD, NOT YET PURCHASED (Dollars in Thousands)       March 31, 2022     December 31, 2021   Equity securities   $ 208     $ 2,488   Other investments sold, not yet purchased   $ 208     $ 2,488     19 Table of Contents     8. 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 FASB 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 FASB 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) related to changes in fair value of investments that are included as a component of other investments, at fair value during the three months ended March 31, 2022 and 2021 of $( 18,718 ) and $ 79,189 , respectively.   The Company recognized net gains (losses) related to changes in fair value of investments that are included as a component of other investments, sold not yet purchased during the three  months ended March 31, 2022 and 2021 of $ 178  and $ 62 , 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 with values that 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 with values that are based on one or more of the following:     1. Quoted prices for similar assets or liabilities in active markets;   2. Quoted prices for identical or similar assets or liabilities in non-active markets;   3. Pricing models 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 with values that 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.   20 Table of Contents   The following tables present information about the Company’s assets and liabilities measured at fair value as of March 31, 2022 and December 31, 2021 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 March 31, 2022 (Dollars in Thousands)                       Significant     Significant               Quoted Prices in     Observable     Unobservable               Active Markets     Inputs     Inputs   Assets   Fair Value     (Level 1)     (Level 2)     (Level 3)   Investments-trading:                                 U.S. government agency MBS and CMOs   $ 118,183     $ -     $ 118,183     $ -   U.S. government agency debt securities     30,793       -       30,793       -   RMBS     8       -       8       -   U.S. Treasury securities     11,595       11,595       -       -   ABS     1       -       1       -   Corporate bonds and redeemable preferred stock     48,132       -       48,132       -   Foreign government bonds     397       -       397       -   Municipal bonds     5,875       -       5,875       -   Derivatives     33,315       -       33,315       -   Equity securities     422       -       422       -   Total investments - trading   $ 248,721     $ 11,595     $ 237,126     $ -                                     Other investments, at fair value:                                 Equity securities   $ 15,437     $ 15,437     $ -     $ -   Restricted equity securities     22,913       -       22,913       -   Corporate bonds and redeemable preferred stock     476       -       476       -   Residential loans     112       -       112       -         38,938     $ 15,437     $ 23,501     $ -   Investments measured at NAV (1)     10,661                           Total other investments, at fair value   $ 49,599                                                             Liabilities                                 Trading securities sold, not yet purchased:                                 U.S. government agency debt securities   $ 1     $ -     $ 1     $ -   U.S. Treasury securities     35,009       35,009       -       -   Corporate bonds and redeemable preferred stock     60,771       -       60,771       -   Derivatives     32,700       -       32,700       -   Total trading securities sold, not yet purchased   $ 128,481     $ 35,009     $ 93,472     $ -                                    Other investments, sold not yet purchased:                                 Equity securities   $ 208     $ 208     $ -     $ -   Total other investments sold, not yet purchased   $ 208     $ 208     $ -     $ -     ( 1 ) As a practical expedient, the Company uses NAV (or its equivalent) to measure the fair value of its investments in the U.S. Insurance JV, the SPAC Fund and the CREO JV. 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.  The CREO JV invests in primarily multi-family commercial real estate mortgage-backed loans and below-investment grade rated tranches in CRE CLOs collateralized by mostly transitional commercial real estate mortgage-backed loans. See note 4. According to ASC 820, these investments are not categorized within the valuation hierarchy.     21 Table of Contents     FAIR VALUE MEASUREMENTS ON A RECURRING BASIS December 31, 2021 (Dollars in Thousands)                       Significant     Significant               Quoted Prices in     Observable     Unobservable               Active Markets     Inputs     Inputs   Assets   Fair Value     (Level 1)     (Level 2)     (Level 3)   Investments-trading:                                 U.S. government agency MBS and CMOs   $ 134,093     $ -     $ 134,093     $ -   U.S. government agency debt securities     22,373       -       22,373       -   RMBS     9       -       9       -   U.S. Treasury securities     -       -       -       -   ABS     1       -       1       -   Corporate bonds and redeemable preferred stock     45,519       -       45,519       -   Foreign government bonds     467       -       467       -   Municipal bonds     18,841       -       18,841       -   Certificates of deposit     169       -       169       -   Derivatives     1,275       -       1,275       -   Equity securities     1,118       -       1,118       -   Total investments - trading   $ 223,865     $ -     $ 223,865     $ -                                     Other investments, at fair value:                                 Equity Securities   $ 24,733     $ 24,733     $ -     $ -   Restricted Equity Securities     19,449       -       19,449       -   Corporate bonds and redeemable preferred stock     476       -       476       -   Residential loans     115       -       115       -         44,773     $ 24,733     $ 20,040     $ -   Investments measured at NAV (1)     11,260                           Total other investments, at fair value   $ 56,033                                                             Liabilities                                 Trading securities sold, not yet purchased:                                 U.S. Treasury securities   $ 29,513     $ 29,513     $ -     $ -   Corporate bonds and redeemable preferred stock     32,574       -       32,574       -   US Government Agency debt     1       1       -       -   Derivatives     424       -       424       -   Total trading securities sold, not yet purchased   $ 62,512     $ 29,514     $ 32,998     $ -                                    Other investments, sold not yet purchased:                                 Equity securities   $ 2,488     $ 2,488     $ -     $ -   Total other investments sold, not yet purchased   $ 2,488     $ 2,488     $ -     $ -     ( 1 ) As a practical expedient, the Company uses NAV (or its equivalent) to measure the fair value of its investments in the U.S. Insurance JV, the SPAC Fund and the CREO JV. 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.  The CREO JV invests in primarily multi-family commercial real estate mortgage-backed loans and below-investment grade rated tranches in CRE CLOs collateralized by mostly transitional commercial real estate mortgage-backed loans. See note 4. According to ASC 820, these investments are not categorized within the valuation hierarchy.         22 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; 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.   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.   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.        23 Table of Contents   Equity Securities : The fair value of equity securities that represent unrestricted investments in publicly traded companies (common or preferred shares, options, warrants, and other equity investments) are determined using the closing price of the security as of the reporting date. These are securities that are traded on 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 investments in privately held companies are generally determined either (i) based on a valuation model or (ii) based on recently observed transactions in the same instrument or similar instrument that we hold.  These valuations are generally classified within either level 2 or level 3 of the valuation hierarchy.     Restricted Equity Securities :  Restricted equity securities are investments in publicly traded companies.  However, they are restricted from re-sale until either (a) the share price trades above a certain threshold for a certain period of time; or (b) a certain period of time elapses or both. The Company determines the fair value by utilizing a model that starts with the publicly traded share price but then applies a discount based on a Monte Carlo simulation.  The inputs to this model are observable so the Company classifies these securities within level 2 of the valuation hierarchy.  The Company is not allowed to sell these shares during the restriction period and there is no certainty as to when these hurdles will be met or if they will be met at all.   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     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 9.   Other Extended Settlement Trades     When the Company buys or sells a financial instrument that will not settle in the regular timeframe, 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.   Equity Derivatives   The Company enters into equity derivatives such as puts and short call options. 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.      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 9.   24 Table of Contents   Investments in Certain Entities that Calculate NAV 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 FASB ASC 820 have been applied), which are measured at fair value on a recurring basis at March 31, 2022 and December 31, 2021 .     Fair Value Unfunded Redemption Redemption   March 31, 2022 Commitments Frequency Notice Period Other investments, at fair value                 CREO (a) $ 6,617 $ 8,464 N/A N/A U.S. Insurance JV (b)   3,529   N/A   N/A   N/A SPAC Fund (c)   515   N/A Quarterly after 1 year lock up 30 days   $ 10,661                       Fair Value     Unfunded     Redemption     Redemption       December 31, 2021     Commitments     Frequency     Notice Period   Other investments, at fair value                                 CREO (a)   $ 5,830     $ 9,170       N/A       N/A   U.S. Insurance JV (b)     3,450       N/A       N/A       N/A   SPAC Fund (c)     1,980       N/A     Quarterly after 1 year lock up     30 days       $ 11,260                               N/A Not Applicable   (a) The CREO JV invests in primarily multi-family commercial real estate mortgage-backed loans and below-investment grade rated tranches in CRE CLOs collateralized by mostly commercial real estate mortgage-backed loans.  See note 4.   (b) The U.S. Insurance JV invests in USD denominated debt issued by small and medium size insurance and reinsurance companies.    (c) The SPAC Fund invests in equity interests of SPACs.   25 Table of Contents     9. DERIVATIVE FINANCIAL INSTRUMENTS   FASB ASC 815, Derivatives and Hedging (“FASB 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 FASB 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 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 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 will be included as a component of other investments, at fair value.   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; and (iii) 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 with collateral that remains “to be announced” until just prior to the trade settlement date. 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.   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.   The Company may, from time to time, enter into the following derivative instruments.   Equity Derivatives   A significant portion of the Company’s equity holdings are carried at fair value.  The Company hedges a portion of this exposure by entering into equity derivatives such as puts and short call options from time to time. These derivative positions are carried at fair value as a component of other investments, at fair value and other investments sold, not yet purchased in the Company’s consolidated balance sheets.  As of   March 31, 2022 and December 31, 2021, the Company had short call options representing a notional of $ 0 and $0, respectively. From time to time, the Company may also enter into forward purchase commitments for equity securities.     The Company also hedges a portion of the exposure from these equity investments by entering into short trades.  These short trades are not treated as derivatives and are carried as a component of other investments sold, not yet purchased.  See Note 7.   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 March 31, 2022 , the Company had open TBA and other forward MBS purchase agreements in the notional amount of $  1,572,500  and open TBA and other forward MBS sale agreements in the notional amount of $  1,597,800 . At December 31, 2021 , the Company had open TBA and other forward agency MBS purchase agreements in the notional amount of $ 1,243,250  and open TBA and other forward agency MBS sale agreements in the notional amount of $ 1,283,850 .   26 Table of Contents   Other Extended Settlement Trades   When the Company buys or sells a financial instrument that will not settle in the regular timeframe, 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 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. As of   March 31, 2022 , and   December 31, 2021 , the Company had no open forward purchase or sales commitments.  Foreign Currency Forward Contracts     The Company invests in foreign currency denominated investments that expose it to fluctuations in foreign currency rates, and, therefore, the Company may, from time to time, hedge such exposure by using foreign currency forward contracts.  The Company carries 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 March 31, 2022 and December 31, 2021 , the Company had no outstanding foreign currency forward contracts.    The following table presents the Company’s derivative financial instruments and the amount and location of the fair value (unrealized gain / (loss)) recognized in the consolidated balance sheets as of March 31, 2022 and December 31, 2021 .       DERIVATIVE FINANCIAL INSTRUMENTS-BALANCE SHEET INFORMATION (Dollars in Thousands)   Derivative Financial Instruments Not Designated as Hedging Instruments Under FASB ASC 815   Balance Sheet Classification   March 31, 2022     December 31, 2021   TBAs and other forward agency MBS   Investments-trading   $ 33,315     $ 1,275   TBAs and other forward agency MBS   Trading securities sold, not yet purchased     ( 32,700 )     ( 424 )         $ 615     $ 851     The following tables present the Company’s derivative financial instruments and the amount and location of the net gain (loss) recognized in the consolidated statements of operations.     DERIVATIVE FINANCIAL INSTRUMENTS-STATEMENT OF OPERATIONS INFORMATION (Dollars in Thousands)   Derivative Financial Instruments Not Designated as Hedging Instruments Under FASB ASC 815 Income Statement Classification   Three Months Ended March 31, 2022     Three Months Ended March 31, 2021   TBAs and other forward agency MBS Revenue-net trading   $ 2,638     $ 2,609         $ 2,638     $ 2,609       27 Table of Contents     10. 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. Until the fourth quarter 2021, the Company categorized its matched book repo business into two major groups: gestation repo and GCF repo.  In the fourth quarter 2021, the Company wound down its GCF repo business.     Gestation Repo     Gestation repo involves entering into repo and reverse repo 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 had 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 used Bank of New York (“BONY”) as its settlement agent for its GCF repo matched book transactions.  The Company was 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.   The FT Financial line of credit arrangement was subsequently amended. In October 2020, the Company entered into a replacement credit agreement with Byline Bank, which was subsequently amended in December 2021.  See note 16.     In October 2021, primarily due to reduced spreads in the repo market for GCF collateral, the Company decided to wind down this business which was completed by December 31, 2021.  As of   March 31, 2022 , the carrying value of the Company's reverse repurchase agreements and repurchase agreements were zero.   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   March 31, 2022 and December 31, 2021 , the Company held reverse repos of $  2,193,562  and $ 3,175,645 , respectively, and the fair value of collateral received under reverse repos was $ 2,216,289 and $ 3,249,411 , respectively.  As of  March 31, 2022 and December 31, 2021 , the reverse repo balance was comprised of receivables collateralized by securities with 15 and 14  counterparties, respectively.   At March 31, 2022 and December 31, 2021 , the Company held repos of $  2,188,415  and $ 3,171,415 , respectively, and the fair value of securities and cash pledged as collateral under repos was $ 2,176,983 and $ 3,232,091 , 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. In conjunction with the wind down of the GCF Repo business, the Company terminated this facility during 2021.   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 did  not consider its GCF repo business to be concentrated because the Company’s reverse repo counterparties were comprised of a diverse group of financial institutions. On the supply side, the Company obtained a significant amount of its funds from the FICC. Therefore, during the period the Company operated a GCF business, it considered that business to be concentrated from the supply side of the business.    28 Table of Contents   The gestation repo business has been and continues to be concentrated as to reverse repurchase counterparties.  The Company conducts this business with a limited number of reverse repo counterparties.  As of March 31, 2022 and December 31, 2021 , the Company’s gestation reverse repos shown in the tables below represented balances from 15  and 14  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 agreement 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.    The total net revenue earned by the Company on its matched book repo business was $ 9,772  for the three months ended March 31, 2022 . The total net revenue earned by the Company on its matched book repo business (both gestation repo and GCF repo) was $ 11,281  for the  three months ended March 31, 2021 .   Detail     ASC 210 provides the option to present reverse repo and repo on a net basis if certain netting conditions are met.  The Company presents all repo and reverse repo transaction, as well as counterparty cash col lateral (see note 13 ), on a gross basis even if the underlying netting conditions are met.  The amounts in the table below are presented on a gross basis.   The following tables summarize the remaining contractual maturity of the gross obligations under repos accounted for as secured borrowings segregated by the underlying collateral pledged as of each date shown.  All amounts as well as counterparty cash collateral (see note 13 ) are subject to master netting arrangements.   SECURED BORROWINGS (Dollars in Thousands) March 31, 2022       Repurchase Agreements       Remaining Contractual Maturity of the Agreements       Overnight and     Up to     30 - 90     Greater than           Collateral Type:   Continuous     30 days     days     90 days     Total   MBS (gestation repo)   $ 374,686     $ 1,813,729     $ -       -     $ 2,188,415       $ 374,686     $ 1,813,729     $ -     $ -     $ 2,188,415         Reverse Repurchase Agreements       Remaining Contractual Maturity of the Agreements       Overnight and     Up to     30 - 90     Greater than           Collateral Type:   Continuous     30 days     days     90 days     Total   MBS (gestation repo)   $ 374,936     $ 1,818,626     $ -     $ -     $ 2,193,562       $ 374,936     $ 1,818,626     $ -     $ -     $ 2,193,562         SECURED BORROWINGS (Dollars in Thousands) December 31, 2021       Repurchase Agreements       Remaining Contractual Maturity of the Agreements       Overnight and     Up to     30 - 90     Greater than           Collateral Type:   Continuous     30 days     days     90 days     Total   MBS (gestation repo)   $ -     $ 3,171,415     $ -     $ -     $ 3,171,415       $ -     $ 3,171,415     $ -     $ -     $ 3,171,415         Reverse Repurchase Agreements       Remaining Contractual Maturity of the Agreements       Overnight and     Up to     30 - 90     Greater than           Collateral Type:   Continuous     30 days     days     90 days     Total   MBS (gestation repo)   $ -     $ 3,175,645     $ -     $ -     $ 3,175,645       $ -     $ 3,175,645     $ -     $ -     $ 3,175,645       29 Table of Contents     11.  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. See notes 8 and 23.   The following table summarizes the activity and earnings in the Company’s investments that are accounted for under the equity method.   INVESTMENTS IN EQUITY METHOD AFFILIATES (Dollars in Thousands)       Insurance SPACs     Dutch Real Estate Entities     Other SPAC Sponsor Entities     Total   January 1, 2022   $ 4,543     $ 5,600     $ 38,095     $ 48,238   Investments / advances     -       -       511       511   Distributions / repayments     -       -       ( 73 )     ( 73 ) Reclasses to (from)     -       -       ( 18,858 )     ( 18,858 ) Earnings / (loss) realized     ( 589 )     ( 8 )     ( 11,507 )     ( 12,104 ) March 31, 2022   $ 3,954     $ 5,592     $ 8,168     $ 17,714         Insurance SPACs     Dutch Real Estate Entities     Other SPAC Sponsor Entities     Total   January 1, 2021   $ 9,807     $ 3,312     $ 363     $ 13,482   Investments / advances     -       2,425       5,967       8,392   Distributions / repayments     ( 3,958 )     -       ( 249 )     ( 4,207 ) Reclasses to (from)                 ( 5,439 )     ( 5,439 ) Earnings / (loss) realized     ( 1,306 )     ( 137 )     37,453       36,010   December 31, 2021   $ 4,543     $ 5,600     $ 38,095     $ 48,238     The Insurance SPACs represent the Company's consolidated subsidiaries equity method investments in various insurance SPACs.  Dutch Real Estate Entities include: (i) Amersfoot Office Investment I Cooperatief U. A. (“AOI”) is a company based in the Netherlands that invests in real estate and (ii) CK Capital Partners B.V. (“CK Capital”) is a company based in the Netherlands that manages investments in real estate.  See note 23.     30 Table of Contents   Other SPAC Sponsor Entities include both indirect and direct investments in SPAC Sponsor Entities.  Several of these Sponsor Entities are invested in SPACs that have completed their business combinations.  Those Sponsor Entities hold restricted and unrestricted equity interests in the public post-merger entities.  The following table shows the equity method balance included in other SPAC Sponsor Entities above broken out by the ultimate investee.     OTHER SPAC SPONSOR ENTITIES MARCH 31, 2022 (Dollars in Thousands)     Entity Ticker   Equity Method Carrying Value   Archer Aviation Inc. ACHR     579   Wejo Group Ltd. WEJO     1,160   Alpha Tau Medical Ltd. DRTS     1,309   Various other Sponsor Entities     5,120   Total   $ 8,168     OTHER SPAC SPONSOR ENTITIES DECEMBER 31, 2021 (Dollars in Thousands)     Entity Ticker   Equity Method Carrying Value   Parella Weinberg Partners PWP   $ 1,128   Archer Aviation Inc. ACHR     728   Wejo Group Ltd. WEJO     1,963   Heliogen, Inc. HLGN     28,448   Various other Sponsor Entities     5,828   Total   $ 38,095     Over time, the Company expects these Sponsor Entities to either (a) liquidate their investments in these companies and distribute to the Company its allocable share of the cash proceeds or (b) to distribute the Company's allocable share of these equity investments in-kind to the Company.  In either case, the final cash realized from these investments will be impacted by the performance of the public companies listed above until those investments are liquidated.       31 Table of Contents     12.   LEASES   The Company leases office space, certain computer and related equipment, and a vehicle under noncancelable operating leases.  From time to time, the Company subleases office space to other tenants.  Under the requirements of FASB 842, the company determines if an arrangement is a lease at the inception date of the contract. 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.   Rent expense is recognized on a straight-line basis over the lease term and is included in business development, occupancy, and equipment expense.   As of  March 31, 2022 , all of the leases to which the Company was a party were operating leases.  The weighted average remaining term of the leases was 6.1  years.  The weighted average discount rate for the leases was 4.52 %.   Maturities of operating lease liability payments consisted of the following.   FUTURE MATURITY OF LEASE LIABILITIES (Dollars in Thousands)       As of March 31, 2022   2022 - remaining   $ 1,740   2023     2,650   2024     2,122   2025     1,767   2026     1,512   Thereafter     3,777   Total     13,568   Less imputed interest     ( 1,843 ) Lease obligation   $ 11,725     During the three months ended March 31, 2022 and 2021 , total cash payments of  $ 535  and $ 383 , respectively, were recorded as a reduction in the operating lease obligation.   No cash payments were made to acquire right of use assets. For the  three months ended March 31, 2022  , rent expense, net of sublease income of  $ 25   respectively was $ 639  .  For the three months ended March 31, 2021 , rent expense, net of sublease income of  $ 70   was  $ 370  .   32 Table of Contents     13.   OTHER RECEIVABLES, OTHER ASSETS, ACCOUNTS PAYABLE AND OTHER LIABILITIES   Other receivables consisted of the following.   OTHER RECEIVABLES (Dollars in Thousands)       March 31, 2022     December 31, 2021   Asset management fees receivable   $ 911     $ 962   Accrued interest receivable and dividend receivable     4,115       1,813   Revenue share receivable     114       108   Miscellaneous other receivables     299       320   Other receivables   $ 5,439     $ 3,203     When the Company enters into a reverse repo, it obtains collateral in excess of the principal amount 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 their collateral with a value equal to such increase.  In some cases, the Company will return to such reverse repo counterparties cash instead of securities.  In that case, the Company includes the cash returned as a component of other receivables (cash collateral due from counterparties). No receivable for cash collateral related to repos exists as of  March 31, 2022 or December 31, 2021.     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 (cash collateral due from counterparties).    Asset management fees receivable are of a routine and short-term nature.  These amounts are generally accrued monthly and paid on a monthly or quarterly basis.  Accrued interest and dividends receivable represent 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 is included as a component of accounts payable and other liabilities in the table entitled Accounts Payable and Other Liabilities below.  Revenue share receivable represents the amount due to the Company for the Company’s share of a revenue arrangement generated from an entity in which the Company receives a share of the entity’s revenue. Miscellaneous other receivables represent other receivables that are of a short-term nature.   Other assets consisted of the following.   OTHER ASSETS (Dollars in Thousands)       March 31, 2022     December 31, 2021   Deferred costs   $ 211     $ 240   Prepaid expenses     1,487       1,286   Deposits     444       479   Miscellaneous other assets     258       258   Furniture, equipment, and leasehold improvements, net     1,622       1,456   Intangible assets     166       166   Other assets   $ 4,188     $ 3,885     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.  See notes 16 to the Company’s consolidated financial statements included in its Annual Report on Form 10 -K for the year ended December 31, 2021 for further discussion of the firm’s furniture, equipment, and leasehold improvements.  Intangible assets represent the carrying value of the JVB broker-dealer license.    Accounts payable and other liabilities consisted of the following.     ACCOUNTS PAYABLE AND OTHER LIABILITIES (Dollars in Thousands)       March 31, 2022     December 31, 2021   Accounts payable   $ 229     $ 122   Redeemable financial instruments accrued interest     176       291   Accrued income tax     396       179   Accrued interest payable     241       558   Accrued interest on securities sold, not yet purchased     1,084       704   Payroll taxes payable     1,358       1,548   Counterparty cash collateral     40,465       17,320   Accrued expense and other liabilities     6,641       2,097   Accounts payable and other liabilities   $ 50,590     $ 22,819     33 Table of Contents   The redeemable financial instrument accrued interest represents accrued interest on the JKD Capital Partners I LTD redeemable financial instrument.  See note 15.   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.    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 10 and 22.    34 Table of Contents     14.   VARIABLE INTEREST ENTITIES    As a general matter, a reporting entity must consolidate a variable interest entity (“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 information regarding the consolidated VIEs:       As of March 31, 2022     As of December 31, 2021   Cash and cash equivalents   $ 49     $ 43   Receivables     -       -   Other investments, at fair value     10,670       9,543   Investment in equity method affiliates     4,030       33,080   Non-controlling interest     ( 11,397 )     ( 29,979 ) Investment in consolidated VIEs   $ 3,352     $ 12,687     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 $ 810 as of   March 31, 2022   and December 31, 2021, respectively.   The Company’s Principal Investing Portfolio   Included in other investments, at fair value in the consolidated balance sheets are investments in several VIEs.  In each case, the Company determined it was not the primary beneficiary.  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  March 31, 2022 , and December 31, 2021,  there were $ 8,464  and $ 9,170 , respectively, of unfunded commitments to VIEs that the Company has invested in.  Other than its investment in these entities, the Company did not provide financial support to these VIEs during the three months ended March 31, 2022 and 2021 and had no liabilities, contingent liabilities, or guarantees (implicit or explicit) related to these VIEs at March 31, 2022 and December 31, 2021 .  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 identified VIEs with the exception of (i) the two trust VIEs that hold the Company’s junior subordinated notes (see note 16 ) 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 March 31, 2022 and December 31, 2021 .   CARRYING VALUE OF VARIABLE INTERESTS IN NON-CONSOLIDATED VARIABLE INTEREST ENTITIES (Dollars in Thousands)       As of March 31, 2022     As of December 31, 2021   Other investments, at fair value   $ 10,661     $ 11,260   Investments in equity method affiliates     12,122       5,015   Maximum exposure   $ 22,783     $ 16,275      35 Table of Contents     15.   REDEEMABLE FINANCIAL INSTRUMENTS   Redeemable financial instruments consisted of the following.   REDEEMABLE FINANCIAL INSTRUMENTS (Dollars in Thousands)       As of March 31, 2022     As of December 31, 2021   JKD Capital Partners I LTD   $ 7,957     $ 7,957       $ 7,957     $ 7,957             36 Table of Contents     16. DEBT     The Company had the following debt outstanding.   DETAIL OF DEBT (Dollars in Thousands)       As of     As of   Interest         Description   March 31, 2022     December 31, 2021   Rate Terms   Interest (3)   Maturity Non-convertible debt:                           10.00% senior note (the "2020 Senior Notes")   $ 4,500     $ 4,500   Fixed   10.00%   January 2024 Contingent convertible debt:                           8.00% convertible senior note (the "2017 Convertible Note")     -       15,000   Fixed   8.00%   March 2023 (1) Less unamortized debt issuance costs     -       ( 67 )                 -       14,933             Junior subordinated notes (2):                           Alesco Capital Trust I     28,125       28,125   Variable   4.30%   July 2037 Sunset Financial Statutory Trust I     20,000       20,000   Variable   5.15%   March 2035 Less unamortized discount     ( 24,027 )     ( 24,164 )                 24,098       23,961                                         ByLine Bank     -       -   Variable   NA   December 2023 Total   $ 28,598     $ 43,394                 ( 1 ) 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 in 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 20 to the Annual Report on Form 10 -K for the year ended December 31, 2021 .  Effective March 20, 2022, the 2017 Note was converted into 10,344,827 units.   ( 2 ) 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 March 31, 2022 on a combined basis was 11.91 % assuming the variable rate in effect on the last day of the reporting period remains in effect until maturity.   ( 3 ) Represents the interest rate in effect as of the last day of the reporting period.            37 Table of Contents   The 2020 Senior Notes   On January 31, 2022, the Operating LLC and JKD Investor entered into a note purchase agreement, pursuant to which, among other things, on such date, (i) JKD Investor paid to the Operating LLC an additional $ 2,250  and (ii) in consideration for such funds, the Operating LLC issued to JKD Investor an Amended and Restated Senior Promissory Note in the aggregate principal amount of $ 4,500  (the “Amended and Restated Note”), which Amended and Restated Note amended and restated the JKD Note in its entirety.  The 2022 Purchase Agreement contains customary representations and warranties on the part of each of JKD Investor and the Operating LLC.  The Company used these proceeds to retire $2,250 of existing 2020 Senior Notes held by RNCS.   The Amended and Restated Note evidences Operating LLC’s obligation to repay to JKD (i) the original principal amount of $2,250  paid by JKD to the Operating LLC under the Original Purchase Agreement, plus (ii) the additional $2,250  paid by JKD to the Operating LLC under the 2022 Purchase Agreement.  Pursuant to the Amended and Restated Note, which is substantially identical to the JKD Note, the unpaid principal amount and all accrued but unpaid interest thereunder will be due and payable in full on January 31, 2024; provided, that, at any time after January 31, 2023 and prior to January 31, 2024, the holder of the Amended and Restated Note may, with at least 31 days’ prior written notice from the holder to the Operating LLC, declare the entire unpaid principal amount outstanding and all interest accrued and unpaid on the Amended and Restated Note to be immediately due and payable.   The Amended and Restated Note accrues interest on the unpaid principal amount from January 31, 2022 until maturity at a rate equal to 10 % per year. Interest on the Amended and Restated Note is payable in cash quarterly on each January 1, April 1, July 1, and October 1, commencing on April 1, 2022. Under the Amended and Restated Note, upon the occurrence or existence of any “Event of Default” thereunder, the outstanding principal amount is (or in certain instances, at the option of the holder thereof, may be) immediately accelerated. Further, upon the occurrence of any “Event of Default” under the Amended and Restated Note and for so long as such Event of Default continues, all principal, interest and other amounts payable under the Amended and Restated Note will bear interest at a rate equal to 11 % per year.  The Amended and Restated Note may not be prepaid in whole or in part prior to January 31, 2023. The Amended and Restated Note may, with at least 31 days’ prior written notice from the Operating LLC to the holder thereof, be prepaid in whole or in part at any time following January 31, 2023 without the prior written consent of the holder and without penalty or premium.   The Amended and Restated Note and the payment of all principal, interest and any other amounts payable thereunder are senior obligations of the Operating LLC and will be senior to any Indebtedness (as defined in the Amended and Restated Note) of the Operating LLC outstanding as of and issued following January 30, 2020 ( the original issuance date of the JKD Note).   Pursua nt to the Amended and Restated Note, following January 31, 2022, the Operating Company may not incur any Indebtedness that is a senior obligation to the Amended and Restated Note.   The 2017 Convertible Note   On March  10, 2017, the Operating LLC entered into a Securities Purchase Agreement (the “2017 Convertible Note Purchase Agreement”), by and among the Operating LLC and DGC Family Fintech Trust, a trust established by Daniel G. Cohen.   Pursuant to the 2017 Convertible Note Purchase Agreement, the DGC Family Fintech Trust agreed to purchase from the Operating LLC, and the Operating LLC agreed to issue and to sell to the DGC Family Fintech Trust, a convertible senior secured promissory note (the “2017 Convertible Note”) in the aggregate principal amount of $15,000.   On March 10, 2017, the DGC Family Fintech Trust paid to the Operating LLC $15,000 in cash in consideration for the 2017 Convertible Note.  As required pursuant to ASC 470, the Company accounted for the 2017 Convertible Notes as conventional convertible debt and did not allocate any amount of the proceeds to the embedded equity option.   Under the 2017 Convertible Note Purchase Agreement, the Operating LLC and the DGC Family Fintech Trust offered customary indemnifications.  Further, the Operating LLC and the DGC Family Fintech Trust provided each other with customary representations and warranties, the Company provided limited representations and warranties to the DGC Family Fintech Trust, and each of the Operating LLC and the Company made customary affirmative covenants.   Pursuant to the 2017 Convertible Note Purchase Agreement, the Company agreed to execute an amendment (the “LLC Agreement Amendment”) to the Amended and Restated Limited Liability Company Agreement of the Operating LLC dated as of December  16, 2009, by and among the Operating LLC and its members, as amended (the “LLC Agreement”) at such time in the future as all of the other members execute the LLC Agreement Amendment.  The LLC Agreement Amendment provides, among other things, that the board of managers will initially consist of Daniel G. Cohen, as chairman of the Operating LLC’s board of managers, Lester R. Brafman (the Company’s current chief executive officer), and Joseph W. Pooler, Jr. (the Company’s current executive vice president, chief financial officer, and treasurer).  The LLC Agreement Amendment also provides that Daniel G. Cohen will not be able to be removed from the Operating LLC’s board of managers or as chairman of the Operating LLC’s board of managers other than for cause or under certain limited circumstances.  On October 30, 2019, each of the members of Cohen & Company, LLC executed the LLC Agreement Amendment.  The outstanding principal amount under the 2017 Convertible Note was due and payable on March 10, 2022 provided that the Operating LLC may, in its sole discretion, extend the maturity date for an additional one -year period, in each case unless the 2017 Convertible Note is earlier converted (in the manner described below).  Effective on March 10, 2020, the Operating LLC exercised its option to extend effective March 10, 2022.     The 2017 Convertible Note accrued interest at a rate of 8 % per year, payable quarterly. Provided that no event of default occurred under the 2017 Convertible Note, if dividends of less than $0.20 per share were paid on the Common Stock in any fiscal quarter prior to an interest payment date, then the Operating LLC may pay one -half of the interest payable on such date in cash, and the remaining one -half of the interest otherwise payable will be added to the principal amount of the 2017 Convertible Note then outstanding. The 2017 Convertible Note contains customary “Events of Default.” Upon the occurrence or existence of any Event of Default under the 2017 Convertible Note, the outstanding principal amount is immediately accelerated in certain limited instances and may be accelerated in all other instances upon notice by the holder of the 2017 Convertible Note to the Operating LLC.  Further, upon the occurrence of any Event of Default under the 2017 Convertible Note and for so long as such Event of Default continues, all principal, interest, and other amounts payable under the 2017 Convertible Note will bear interest at a rate equal to 9 % per year. The 2017 Convertible Note could  not be prepaid in whole or in part prior to the maturity date without the prior written consent of the holder thereof (which may be granted or withheld in its sole discretion).  The 2017 Convertible Note was secured by the equity interests held by the Operating LLC in all of its subsidiaries.   38 Table of Contents   At any time following March 10, 2017, all or any portion of the outstanding principal amount of the 2017 Convertible Note may be converted by the holder thereof into units of membership interests of the Operating LLC (“LLC Units”) at a conversion rate equal to $ 1.45 per unit, subject to customary anti-dilution adjustments.  Units of the Operating LLC not held by Cohen & Company Inc. may, with certain restrictions, be redeemed and exchanged into shares of the Company on a ten -for- one basis.  Therefore, the 2017 Convertible Note can be converted into Operating LLC units and then redeemed and exchanged into Common Stock at an effective conversion price of $14.50.   Under the 2017 Convertible Note Purchase Agreement, the Company submitted a proposal to the Company’s stockholders at its 2017 annual meeting of stockholders to approve the Company’s issuance, if any, of Common Stock upon any redemption of the LLC Units and the Company’s board of directors agreed to recommend that the Company’s stockholders vote to approve such proposal.  The proposal was approved at the Company’s 2017 annual meeting.   Following any conversion of the 2017 Convertible Note into LLC Units, the holder of such LLC Units will have the same rights of redemption, if any, held by the holders of LLC Units as set forth in the LLC Agreement; provided that the holder will have no such redemption rights with respect to such LLC Units if the Company’s board of directors determines in good faith that satisfaction of such redemption by the Company with shares of its Common Stock would (i) 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, or (ii) constitute a “Change of Control” under the Junior Subordinated Indenture, dated as of June  25, 2007, between the Company (formerly Alesco Financial Inc.) and Wells Fargo Bank, N.A., as trustee.   Under the 2017 Convertible Note, if following any conversion of the 2017 Convertible Note into LLC Units, for so long as the Company owns a number of LLC Units representing less than a majority of the voting control of the Operating LLC, each holder of any LLC Units issued as a result of the conversion of the 2017 Convertible Note (regardless of how such LLC Units were acquired by such holder) is obligated to grant and appoint the Company as such holder’s proxy and attorney-in-fact to vote (i) the number of LLC Units owned by each such holder that, if voted by the Company, would give the Company a majority of the voting control of the Operating LLC, or (ii) if such holder holds less than such number of LLC Units, all such holder’s LLC Units.  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.   On March 20, 2022, the DGC Trust elected to convert the Note into an aggregate of 10,344,827 units of membership interests  in the Operating LLC at the conversion rate specified in the Note of $ 1.45 per unit. As a result of such conversion, the Note was cancelled in its entirety.   Pursuant to the terms and conditions of the Operating LLC’s Amended and Restated Limited Liability Company Agreement, dated December 16, 2009, as amended, a holder of LLC units of membership interests may cause the Operating LLC to redeem such units of membership interests at any time for, at the Company’s option, (A) cash or (B) one share of the Company’s common stock, par value $ 0.01 per share (“Common Stock”), for every ten of such units of membership interests. Accordingly, the units of membership interests  may be redeemed at any time by the DGC Trust into an aggregate of 1,034,482 shares of Common Stock.   Pursuant to the DGC Trust’s governing documents, Daniel G. Cohen has the ability to acquire at any time any of the DGC Trust’s assets, including the units of membership interests, by substituting other property of an equivalent value without the approval or consent of any person, including any trustee or beneficiary of the DGC Trust.   39 Table of Contents   Byline Bank   On October 28, 2020, ( i) the Company entered into a loan agreement (the “Original Byline Loan Agreement”) with Byline Bank, as lender, and JVB as borrower, by and among Byline Bank, the Company, the Operating LLC, JVB Holdings, JVB and C&Co PrinceRidge Holdings, LP, pursuant to which Byline Bank agreed to make loans at JVBs request from time to time in the aggregate amount of up to $ 7,500 , and (ii) JVB and Byline Bank entered into a Revolving Note and Cash Subordination Agreement (the "Original Byline Note and Subordination Agreement"), pursuant to which Byline Bank agreed to make loans at JVB’s request from time to time in the aggregate amount of up to $17,500.   The Company drew $ 17,500 under the Original Byline Note and Subordination Agreement during 2021 and repaid it in full during 2021.    The Company, and the Company’s subsidiaries, the Operating LLC and JVB Holdings, served as guarantors of both the $7,500  and $17,500  facilities.   On December 21, 2021, ( i) JVB and Byline Bank entered into the Amended and Restated Revolving Note and Cash Subordination Agreement (the “Amended and Restated Byline Loan Agreement”), which amended and restated the Original Byline Loan Agreement in its entirety, and (ii) the Original Byline Note and Subordination Agreement was terminated by the parties thereto. Pursuant to the Amended and Restated Byline Loan Agreement, Byline Bank agreed to make loans to JVB, at JVB’s request from time to time, in the aggregate amount of up to $25,000.     Loans (both principal and interest) made by Byline Bank to JVB under the Amended and Restated Byline Loan Agreement are scheduled to mature and become immediately due and payable in full on December 21, 2023. In addition, loans may be made until December 21, 2022.  Loans will 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%. JVB 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 Byline Bank’s $ 25,000  commitment. JVB is also required to pay on each anniversary of December 21, 2021, a commitment fee at a per annum rate equal to 0.50 % of the $25,000 commitment.  JVB paid Byline Bank a commitment fee of $ 125  on December 21, 2021, in connection with the execution of the Amended and Restated Byline Loan Agreement.   JVB may request a reduction in the $25,000  commitment in a minimum amount of $ 1,000  and in multiples of $ 500  thereafter or such lesser amount as would bring the $25,000 loan commitment to the total principal amount of loans advanced under the Amended and Restated Byline Loan Agreement.  The obligations of JVB under the Amended and Restated Agreement are guaranteed by the Company, the Operating LLC and JVB Holdings (the “Guarantors”) and are secured by a lien on all of JVB Holdings’ property, including its 100 % ownership interest in all of the outstanding membership interests of JVB.  Pursuant to the Amended and Restated Byline Loan Agreement, JVB and the Guarantors provide customary representations and warranties for a transaction of this type.   Effective December 22, 2021, the Company received approval from FINRA to treat draws under the Amended and Restated Byline Loan Agreement as qualified subordinated debt.  As such, draws may be treated as an increase in net capital for purposes of FINRA Rule 15 (c) 3 - 1.   The Amended and Restated Byline Loan Agreement also includes customary covenants for a transaction of this type, including covenants limiting the indebtedness that can be incurred by JVB and JVB Holdings and restricting JVB’s ability to make certain loans and investments. Additionally, JVB may not permit its (i) net worth to be less than $ 85,000  from December 31, 2021, through and including December 30, 2022, and $ 90,000  from December 31, 2022, and thereafter; and (ii) excess net capital to be less than $ 40,000  at any time. Further, any loans outstanding under the Amended and Restated Byline Loan Agreement may not exceed 0.25 times JVB's tangible net worth.  As of  March 31, 2022, and December 31, 2021, no amounts were outstanding under the Amended and Restated Byline Loan Agreement and the Company was in compliance with all of these financial covenants.   Pursuant to the Amended and Restated Byline Agreement, JVB may repay its existing outstanding indebtedness provided, however, that if the anticipated payment relates to the payment of any dividend by JVB, on the date such payment is made, and immediately after making such payment, the loans outstanding may not exceed $ 10,000 .  The Amended and Restated Byline Loan Agreement contains customary events of default for a transaction of this type. If an event of default occurs and is continuing, then Byline Bank may declare and cause all or any part of the loans thereunder and all other liabilities outstanding under the Amended and Restated Byline Loan Agreement to become immediately due and payable.   In the financial statements and other footnotes set forth in this Quarterly Report on Form 10 -Q, the term "Byline LOC" refers to either the Original Byline Note and Subordination Agreement or the Amended and Restated Byline Loan Agreement, depending on the applicable time period.     40 Table of Contents   Interest Expense, net     INTEREST EXPENSE (Dollars in Thousands)       Three Months Ended March 31,       2022     2021   Junior subordinated notes   $ 657     $ 647   2020 Senior Notes     119       133   2017 Convertible Note     327       375   2013 Convertible Notes / 2019 Senior Notes     -       71   Byline Credit Facility     72       65   Redeemable Financial Instrument - DGC Trust / CBF     -       197   Redeemable Financial Instrument - JKD Capital Partners I LTD     176       526       $ 1,351     $ 2,014     41 Table of Contents     17. EQUITY     Stockholders’ Equity   Common Equity : The following table reflects the activity for the three months ended March 31, 2022 related to the number of shares of unrestricted Common Stock that the Company had issued.       Common Stock       Shares   December 31, 2021     1,331,150   Vesting of shares     110,014   Shares withheld for employee taxes and retired     ( 14,308 ) Repurchase and retirement of Common Stock     -   March 31, 2022     1,426,856     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 ten shares of Series E Preferred Stock, the holders 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 issued and outstanding as of March 31, 2022 . For a more detailed description of these shares see note 21 to the Company’s Annual Report on Form 10 -K for the year ended December 31, 2021 .   Series F Voting Non-Convertible Preferred Stock :  On December 23, 2019, the Company’s board of directors adopted a resolution that reclassified 25,000,000 authorized but unissued shares of Preferred Stock, par value $ 0.001 per share, of the Company as a series of Preferred Stock designated as Series F Voting Non-Convertible Preferred Stock (“Series F Preferred Stock”).  Pursuant to the Securities Purchase Agreement (the “SPA”), dated December 30, 2019, by and among the Company, the Operating LLC, Daniel G. Cohen, and the DGC Trust, 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 Series F Preferred Stock have substantially the same rights as the Series E Preferred Stock.  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 Company is required or permitted.  Each outstanding share of Series F Preferred Stock entitles the holder to one vote for every ten shares of Series F Preferred Stock on each matter submitted to the holders for their vote.  As of  March 31, 2022 , there were 22,429,541 shares of Series F Preferred Stock issued and outstanding .   For a more detailed description of these shares see note 21 to the Company’s Annual Report on Form 10 -K for the year ended December 31, 2021 .   Stockholder Rights Plan   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. 42 Table of Contents   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.   43 Table of Contents   Acquisition and Surrender of Additional Units of the Operating LLC, net : Effective January 1, 2011 and revised effective May 27, 2021, Cohen & Company Inc. and the Operating LLC entered into a Unit Issuance and Surrender Agreement (the “UIS Agreement”), that was approved by the board of directors of Cohen & Company Inc. and the board of managers of the Operating LLC. In an effort to maintain a 1:10 ratio of Common Stock to the number 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 Cohen & Company Inc. issues its Common Stock to employees under existing equity compensation plans or issues its Common Stock in a public or private offering. 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.   During the three months ended March 31, 2022 , Cohen & Company Inc. received and surrendered units of the Operating LLC. The following table displays the amount of units surrendered (net of receipts) by Cohen & Company Inc.       Operating LLC       Membership Units   Other units related to UIS Agreement     957,060   Units surrendered from retirement of Common Stock     -   Total     957,060     The Company recognized a net decrease in additional paid in capital of $ 292  and a net increase in AOCI of $ 4  with an offsetting increase in non-controlling interest of  $ 288  in connection with the acquisition and surrender of additional units of the Operating LLC. The following schedule presents the effects of changes in Cohen & Company Inc.’s ownership interest in the Operating LLC on the equity attributable to Cohen & Company Inc. for the three months ended March 31, 2022 and 2021 .         Three Months Ended     Three Months Ended       March 31, 2022     March 31, 2021   Net income / (loss) attributable to Cohen & Company Inc.   $ ( 7,612 )   $ 9,355   Transfers (to) from the non-controlling interest:                 Increase / (decrease) in Cohen & Company, Inc. paid in capital for the acquisition / (surrender) of additional units in consolidated subsidiary, net     ( 292 )     926   Changes from net income / (loss) attributable to Cohen & Company Inc. and transfers (to) from the non-controlling interest   $ ( 7,904 )   $ 10,281     Repurchases of Shares and Retirement of Treasury Stock      On December 21, 2020, the Company entered into a letter agreement (the “December 2020 Letter Agreement”).  The December 2020 Letter Agreement was entered into with Piper Sandler & Co. (the "Agent").  The December 2020 Letter Agreement authorized the Agent to use reasonable efforts to purchase, on the Company’s behalf, up to an aggregate maximum amount of $ 1,000  of Common Stock on any day that the NYSE American Stock Exchange was open for business. The December 2020 Letter Agreement was effective from December 23, 2020  until July 28, 2021, at which time the aggregate maximum purchase authorization thereunder was reached.  The December 2020 Letter Agreement was designed to comply with Rule 10b5 - 1 under the Exchange Act.     During the three months ended March 31, 2021 , the Company repurchased 38,647  shares in the open market pursuant to the December 2020 Letter Agreement for a total purchase price of $ 662 .   All of the purchases 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 Company's Common Stock, having an aggregate offering price of up to $ 75,000 (collectively the “Shares”). Sales of the Shares, if any, under the Equity Agreement will be made in sales deemed to be “at-the-market offerings” as defined in Rule  415  under the Securities Act as agreed with the Sales Agent. In accordance with applicable rules of the SEC, the Company was permitted to sell an aggregate of up to $ 9,318 in Shares under the Equity Agreement, which represented one - third of the value of the Common Stock held by non-affiliates as of March 5, 2021.    On June 7, 2021, the Company entered into a letter agreement (the “Equity Distribution Letter Agreement”) with the Sales Agent, pursuant to which the Sales Agent agreed to use its best efforts to, commencing on June  5, 2021, sell on the Company’s behalf up to $ 7,966  of the shares in the open market pursuant to the terms and conditions of the Equity Agreement and the Equity Distribution Letter Agreement, and the Company agreed not to take any action that would cause the sales of the Shares under the Equity Distribution Letter Agreement not to comply with Rule 10b5 - 1 or Regulation M under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Equity Distribution Letter Agreement was entered into in connection with the ATM Program and is designed to comply with Rule  10b5 - 1  under the Exchange Act.   The Equity 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 Equity 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.   44 Table of Contents   During the three months ended March 31, 2021 no shares were sold by the Company under the Equity Agreement.  During the year ended December 31, 2021,  the Company sold 300,859  shares in the open market pursuant to the Equity Distribution Agreement for a total net sale price of $ 9,076 .   Detail of Non-Controlling Interest   ROLLFORWARD OF NON-CONTROLLING INTERESTS (Dollars in Thousands)       Operating LLC     Insurance SPAC III Sponsor Entities     Other Consolidated Subsidiaries     Total   December 31, 2021   $ 57,628     $ 4,808     $ 27,056     $ 89,492   Non-controlling interest share of (loss)     ( 12,850 )     ( 297 )     ( 14,407 )     ( 27,554 ) Other comprehensive (loss)     ( 47 )     -       -       ( 47 ) Acquisition / (surrender) of additional units of consolidated subsidiary     288       -       -       288   Equity-based compensation     766       -       -       766   Shares withheld for employee taxes     ( 145 )     -       -       ( 145 ) Investment of convertible non-controlling interest of Cohen & Company Inc.     15,000       -       -       15,000   Investment of non-convertible non-controlling interest of Operating LLC     -       -       6       6   Distributions to convertible non-controlling interest of Cohen & Company Inc.     ( 3,475 )     -       -       ( 3,475 ) Distributions to non-convertible non-controlling interest of Operating LLC     -       -       ( 5,660 )     ( 5,660 ) March 31, 2022   $ 57,165     $ 4,511     $ 6,995     $ 68,671       See note 21  to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10 -K for the year ended December 31, 2021, for a discussion of the Company’s non-controlling interests.       45 Table of Contents     18 . 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.  As of March 31, 2022 , JVB's minimum required net capital was $ 250 , and actual net capital was $ 56,854 , which exceeded the minimum requirements by $ 56,604 .  CCFESA, a subsidiary of the Company, is regulated by the ACPR in France. CCFESA is subject to certain regulatory capital requirements in accordance with Articles L.533 - 2 et seq. of the French Financial and Monetary Code, implementing the new framework set out in the Investment Firm Regulation ("IFR") and the Investment Firm Directive ("IFD").  As of March 31, 2022, the total minimum required net liquid capital was $ 534  and actual net liquid capital in CCFESA was $ 1,091 , which exceeded the minimum requirement by $ 557 . CCFEL cancelled its license with the CBI.  The Company received its withdrawal license from the CBI on April 7, 2022.       46 Table of Contents      19 . 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)       Three Months Ended March 31,       2022     2021   Net income / (loss) attributable to Cohen & Company Inc.   $ ( 7,612 )   $ 9,355   Add: Net income (loss) attributable to the convertible non-controlling interest of Cohen & Company Inc.     -       27,403   Add: Interest expense incurred on dilutive convertible notes     -       289   Add / (deduct): Adjustment (2)     -       ( 1,751 ) Net income / (loss) on a fully converted basis   $ ( 7,612 )   $ 35,296                     Weighted average common shares outstanding - Basic     1,394,954       1,034,287   Unrestricted Operating LLC membership units exchangeable into Cohen & Company, Inc. shares (1)     -       2,838,132   Restricted units or shares     -       146,660   Shares issuable upon conversion of dilutive convertible notes     -       1,034,483   Weighted average common shares outstanding - Diluted (3)     1,394,954       5,053,562                     Net income / (loss) per common share - Basic   $ ( 5.46 )   $ 9.04                     Net income / (loss) per common share - Diluted   $ ( 5.46 )   $ 6.98     ( 1 ) The Operating LLC units of membership interest 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, as applicable, 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:       Three Months Ended March 31,       2022     2021   Unrestricted Operating LLC membership units exchangeable into Cohen & Company, Inc. shares     3,043,802         2017 Convertible Note Units     896,552       -   Restricted Common Stock     81,792       -   Restricted Operating LLC units     44,102       -                           4,066,248       -     47 Table of Contents     20. COMMITMENTS AND CONTINGENCIES   Legal and Regulatory Proceedings   On October 8, 2021, Cohen & Company, Ltd., an Ohio limited liability company, as plaintiff, filed a complaint with the United States District Court, Eastern District of Pennsylvania, under the caption Cohen & Company, Ltd. v. Cohen & Company Inc. , alleging that Cohen & Company, Inc., as defendant, has been using the “Cohen & Company” trademark and business name, which allegedly infringes and unfairly competes with the plaintiff’s registered trademarks “Cohen & Company” and “Cohen & Co,” in violation of applicable federal and state trademark laws and regulations.  Pursuant to the complaint, the plaintiff has demanded that the defendant be permanently enjoined from using the “Cohen & Company” trademark and business name in connection with its business, pay to the plaintiff statutory damages, attorneys’ fees and costs and other damages, and pay over to plaintiff all gains, profits and advantages realized by the defendant from its allegedly unlawful acts and omissions.  As of the date of this Quarterly Report on Form 10 -Q, the Company has been served with the complaint and filed a partial motion to dismiss the complaint on April 18, 2022.  The Company intends to vigorously defend itself against the allegations set forth therein.     From time to time, the Company is a party to various routine legal proceedings, claims, and regulatory inquiries arising out of the ordinary course of the Company’s business. Management believes that the results of these routine legal proceedings, claims, and regulatory matters will not have a material adverse effect on the Company’s financial condition, or on the Company’s operations and cash flows. However, the Company cannot estimate the legal fees and expenses to be incurred in connection with these routine matters and, therefore, is unable to determine whether these future legal fees and expenses will have a material impact on the Company’s operations and cash flows. It is the Company’s policy to expense legal and other fees as incurred.    48 Table of Contents       21. SEGMENT AND GEOGRAPHIC INFORMATION     The Company operates within three business segments: Capital Markets, Asset Management, and Principal Investing. See note  1.   The Company’s business segment information was prepared using the following methodologies and generally represents the information that is relied upon by management in its decision- making processes:  (a) revenues and expenses directly associated with each business segment are included in determining net income / (loss) by segment, and (b) indirect expenses (such as general and administrative expenses including executive and indirect overhead costs) not directly associated with specific business segments are not allocated to the business segments’ statements of operations.  Accordingly, the Company presents segment information consistent with internal management reporting. See note ( 1 ) in the table below for more detail on unallocated items. The following tables present the financial information for the Company’s segments for the periods indicated.       SEGMENT INFORMATION Statement of Operations Information Three Months Ended March 31, 2022       Capital     Asset     Principal     Segment     Unallocated               Markets     Management     Investing     Total     (1)     Total   Net trading   $ 12,022     $ -     $ -     $ 12,022     $ -     $ 12,022   Asset management     -       1,889       -       1,889       -       1,889   New issue and advisory     3,770       -       -       3,770       -       3,770   Principal transactions and other income     ( 1 )     114       ( 18,476 )     ( 18,363 )     -       ( 18,363 ) Total revenues     15,791       2,003       ( 18,476 )     ( 682 )     -       ( 682 ) Compensation     9,862       1,450       195       11,507       2,372       13,879   Other Operating Expense     3,435       370       148       3,953       1,364       5,317   Total operating expenses     13,297       1,820       343       15,460       3,736       19,196   Operating income (loss)     2,494       183       ( 18,819 )     ( 16,142 )     ( 3,736 )     ( 19,878 ) Interest income (expense)     ( 72 )     -       -       ( 72 )     ( 1,279 )     ( 1,351 ) Income (loss) from equity method affiliates     -       -       ( 12,104 )     ( 12,104 )     -       ( 12,104 ) Other non-operating income     -       -       -       -       -       -   Income (loss) before income taxes     2,422       183       ( 30,923 )     ( 28,318 )     ( 5,015 )     ( 33,333 ) Income tax expense (benefit)     -       -       -       -       1,833       1,833   Net income (loss)     2,422       183       ( 30,923 )     ( 28,318 )     ( 6,848 )     ( 35,166 ) Less: Net income (loss) attributable to the non-controlling interest     -       -       ( 14,703 )     ( 14,703 )     ( 12,851 )     ( 27,554 ) Net income (loss) attributable to Cohen & Company Inc.   $ 2,422     $ 183     $ ( 16,220 )   $ ( 13,615 )   $ 6,003     $ ( 7,612 )                                                   Other statement of operations data                                                 Depreciation and amortization (included in total operating expense)   $ -     $ 1     $ -     $ 1     $ 131     $ 132     SEGMENT INFORMATION Statement of Operations Information Three Months Ended March 31, 2021       Capital     Asset     Principal     Segment     Unallocated               Markets     Management     Investing     Total     (1)     Total   Net trading   $ 19,183     $ -     $ -     $ 19,183     $ -     $ 19,183   Asset management     -       2,093       -       2,093       -       2,093   New issue and advisory     1,839       -       -       1,839       -       1,839   Principal transactions and other income     ( 1 )     160       79,402       79,561       -       79,561   Total revenues     21,021       2,253       79,402       102,676       -       102,676   Compensation     9,397       1,456       13,287       24,140       2,507       26,647   Other Operating Expense     3,630       399       19       4,048       1,536       5,584   Total operating expenses     13,027       1,855       13,306       28,188       4,043       32,231   Operating income (loss)     7,994       398       66,096       74,488       ( 4,043 )     70,445   Interest (expense) income     ( 65 )     -       -       ( 65 )     ( 1,949 )     ( 2,014 ) Income (loss) from equity method affiliates     -       -       ( 835 )     ( 835 )     -       ( 835 ) Income (loss) before income taxes     7,929       398       65,261       73,588       ( 5,992 )     67,596   Income tax expense (benefit)     -       -       -       -       868       868   Net income (loss)     7,929       398       65,261       73,588       ( 6,860 )     66,728   Less: Net income (loss) attributable to the non-controlling interest     -       ( 5 )     29,975       29,970       27,403       57,373   Net income (loss) attributable to Cohen & Company Inc.   $ 7,929     $ 403     $ 35,286     $ 43,618     $ ( 34,263 )   $ 9,355                                                     Other statement of operations data                                                 Depreciation and amortization (included in total operating expense)   $ 1     $ 1     $ -     $ 2     $ 79     $ 81     49 Table of Contents         BALANCE SHEET DATA   As of March 31, 2022   (Dollars in Thousands)         Capital     Asset     Principal     Segment     Unallocated               Markets     Management     Investing     Total     (1)     Total   Total Assets   $ 2,595,421     $ 3,459     $ 67,545     $ 2,666,425     $ 40,307     $ 2,706,732                                                     Included within total assets:                                                 Investments in equity method affiliates   $ -     $ -     $ 17,714     $ 17,714     $ -     $ 17,714   Goodwill (2)   $ 54     $ 55     $ -     $ 109     $ -     $ 109   Intangible assets (2)   $ 166     $ -     $ -     $ 166     $ -     $ 166       BALANCE SHEET DATA December 31, 2021 (Dollars in Thousands)       Capital     Asset     Principal     Segment     Unallocated               Markets     Management     Investing     Total     (1)     Total   Total Assets   $ 3,501,973     $ 5,251     $ 104,491     $ 3,611,715     $ 44,589     $ 3,656,304                                                     Included within total assets:                                                 Investments in equity method affiliates   $ -     $ -     $ 48,238     $ 48,238     $ -     $ 48,238   Goodwill (2)   $ 54     $ 55     $ -     $ 109     $ -     $ 109   Intangible assets (2)   $ 166     $ -     $ -     $ 166     $ -     $ 166     ( 1 ) Unallocated assets primarily include: ( 1 ) amounts due from related parties; ( 2 ) furniture and equipment, net; and ( 3 ) other assets that are not considered necessary for an understanding of business segment assets. Such amounts are excluded in business segment reporting to the chief operating decision maker. ( 2 ) Goodwill and intangible assets are allocated to the Capital Markets and Asset Management business segments as indicated in the table above.   Geographic Information   The Company conducts its business activities through offices in the following locations: ( 1 ) United States and ( 2 ) United Kingdom and Other.  Total revenues by geographic area are summarized as follows.       GEOGRAPHIC DATA (Dollars in Thousands)       Three Months Ended March 31,       2022     2021   Total Revenues:                 United States   $ ( 1,529 )   $ 100,917   Europe & Other     847       1,759   Total   $ ( 682 )   $ 102,676     Long-lived assets attributable to an individual country, other than the United States, are not material.    50 Table of Contents     22 . SUPPLEMENTAL CASH FLOW DISCLOSURE   Interest paid by the Company on its debt and redeemable financial instruments was $ 1,551  and  $ 1,585  for the three months ended March 31, 2022 and 2021 , respectively.   The Company paid income taxes of $ 154  and $ 102  for the three months ended March 31, 2022 and 2021 , respectively. The Company received no income tax refunds for three months ended March 31, 2022 and 2021 . respectively.   For the three months ended March 31, 2022 , the Company had the following significant non-cash transactions that are not reflected on the statement of cash flows:     ●  The Company net surrendered units of membership interests in the Operating LLC.  The Company recognized a net decrease in additional paid-in capital of $ 292 , a net increase of $ 4  in AOCI, and an  increase of $ 288  in non-controlling interest.     ●  The Company recorded a $ 15,000 increase in convertible non-controlling interest and a $ 15,000 decrease in debt as a result of the DGC Trust election to convert the 2017 Convertible Note into units of membership interest of the Operating LLC.   ●  The Company recorded an accrual of $ 4,760 in accounts payable and other accrued liabilities for dividends and distributions declared on March 7, 20222, which were paid after March 31, 2022.   ●  The Company recorded a decrease  in equity method affiliates of $ 18,858 and an increase in other investments at fair value of $ 18,858 resulting from an in-kind distribution from equity method affiliates.   ●  The Company recorded a decrease in other investments at fair value of $ 3,885 and a corresponding decrease in non-controlling interest resulting from an in-kind distribution from a SPAC sponsor entity.   ●  The Company recorded an increase in other investments at fair value of $ 836 and a corresponding decrease in other investment, not sold of $ 836 resulting from an investment reclass.   For the three months ended March 31, 2021 , the Company had the following significant non-cash transactions that are not reflected on the statement of cash flows:     ●  The Company net surrendered units of membership interests in the Operating LLC.  The Company recognized a net increase in additional paid-in capital of $ 926 , a net increase of $ 4  in AOCI, and a decrease of $ 930  in non-controlling interest.  See note 17.   ●  The Company recorded a decrease of $ 2,103 in due from related party, a corresponding increase of $ 701 in other investments at fair value, and a corresponding decrease of $ 1,402 to non-controlling interest, all as a result an in-kind distribution of incremental LP interests, from the 2020 performance fee earned, to all the members of Vellar GP, including the Company.   ●  The Company recorded a decrease of $ 3,958 in equity method affiliates and a $ 279 decrease in other investments, at fair value from the completion of the Insurance SPAC II Merger.   ●  The Company recorded a decrease in other investments at fair value of $ 20,119  resulting from an in-kind distribution relating to the Insurance SPAC Merger.    As part of the Company's matched book repo operations, the Company enters into reverse repos with counterparties whereby it lends money and receives securities as collateral.  In accordance with ASC 860, the collateral securities are not recorded in the Company's consolidated balance sheets.  However, from time to time the Company will hold cash instead of securities as collateral for these transactions.  When the Company is provided cash as collateral for reverse repo transactions, the Company will make an entry to increase its cash and cash equivalents and to increase its other liabilities for the amount of cash received.  There are two main reasons the Company  may receive collateral in the form of cash as opposed to securities.  First, when the value of the collateral securities the Company has in its possession declines, the Company will require the counterparty to provide it with additional collateral.  The Company will accept either cash or additional liquid securities.  Often, the Company's counterparties will provide it with cash as they may not have liquid securities readily available.  Second, from time to time, the Company's counterparties require a portion of the collateral securities in the Company's possession returned to them for operating purposes.  In such instances, the counterparty may not have substitute liquid securities available and will often provide the Company with cash as collateral instead.  It is important to note that when the Company receives cash as collateral, it is temporary in nature and the Company has an obligation to return that cash when the counterparty provides substitute liquid securities as collateral or otherwise satisfies their associated reverse repo obligation.  The Company is generally required to return any cash collateral the same business day that it receives substitute securities.  See note 13.     The Company has no legal or contractual obligation to segregate this cash collateral held and therefore it is included as a component of its cash and cash equivalents in the Company's consolidated balance sheets.  However, it is not available for use in the Company's general operations as the Company must stand ready at all times to return the collateral held immediately once the reverse repo counterparty provides substitute liquid securities or the repo matures.    The following table shows the impact of changes in these collateral deposits had on our cash flows in each period presented:        Three Months Ended March 31,       2022     2021   Collateral deposit end of period   $ 40,465     $ 29,275   Less: Collateral deposit beginning of period     17,320       41,119   Impact to cash flow from operations   $ 23,145     $ ( 11,844 )   51 Table of Contents     23 . RELATED PARTY TRANSACTIONS   The Company has identified the following related party transactions for the three months ended March 31, 2022 and 2021 . The transactions are listed by related party and, unless otherwise noted in the text of the description, the amounts are disclosed in the tables at the end of this section.   A. The Bancorp, Inc. (“TBBK”)   TBBK is identified as a related party because Daniel G. Cohen was chairman of TBBK through October 31, 2021.  Thereafter, TBBK will no longer be treated as a related party to the Company.   As part of the Company’s broker-dealer operations, the Company from time to time purchases securities from third parties and sells those securities to TBBK. The Company may purchase securities from TBBK and ultimately sell those securities to third parties. In either of the cases listed above, the Company includes the trading revenue earned (i.e. the gain or loss realized, or commission earned) by the Company for the entire transaction in the as part of net trading in the table.  For the three  months ending March 31, 2022 and March 31, 2021, the Company earned no trading revenue from transactions with TBBK.   From time to time, the Company will enter into repo agreements with TBBK as its counterparty.  As of March 31, 2022 and December 31, 2021 , the Company had no  repo agreements with TBBK as counterparty.  For the three months ended March 31, 2022 , and 2021 , the Company incurred no interest expense related to repos with TBBK as its counterparty.   B. Daniel G. Cohen/Cohen Bros. Financial, LLC (“CBF”)/ EBC 2013 Family Trust (“EBC”)    CBF has been identified as a related party because (i) CBF is a non-controlling interest holder of the Company and (ii) CBF is wholly owned by Daniel G. Cohen. On September 29, 2017, CBF also invested $ 8,000 of the $ 10,000 total investment in the Company’s Redeemable Financial Instrument – DGC Trust / CBF pursuant to the CBF Investment Agreement.  The Company incurred interest expense on this instrument, which is disclosed as part of interest expense incurred in the table at the end of this section.  In March 2021 and October 2020,  payments of $ 4,000 and $ 2,500 , respectively, were made by the Company to CBF, which fully extinguished the redeemable financial instrument balance.  See notes 15  and 16.   EBC has been identified as a related party because Daniel G. Cohen is a trustee of EBC and has sole voting power with respect to all shares of the Company held by EBC.  In September 2013, EBC, as an assignee of CBF, made a $ 4,000 investment in the Company.  The Company issued $ 2,400 in principal amount of the 2013 Convertible Notes and $ 1,600 of Common Stock to EBC. On September 25, 2019, the 2013 Convertible Notes were amended and restated by the 2019 Senior Notes.  On September 25, 2020 the 2019 Senior Notes were amended again to extend their maturity date until September 25, 2021. The Company fully paid and extinguished the 2019 Notes on September 24, 2021.   The Company incurred interest expense on this debt. See note 20 to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10 -K for the year ended December 31, 2021.  The Company incurred interest expense on this debt, which is disclosed as part of interest expense incurred in the table at the end of this section.   C. JKD Investor     The JKD Investor is an entity owned by Jack J. DiMaio, the vice chairman of the board of directors and vice chairman of the Operating LLC’s board of managers and his spouse.  On October 3, 2016, JKD Investor invested $ 6,000 in the Operating LLC.  Additional investments were made in January 2017 and January 2019 in the amounts of $ 1,000 and $ 1,268 respectively.  See note 15. The interest expense incurred on this investment is disclosed in the table at the end of this section.    On January 31, 2020, JKD Investor purchased $ 2,250 of the 2020 Senior Notes. On January  31, 2022, the Operating LLC and JKD entered into the 2022 Note Purchase Agreement, pursuant to which, among other things, on such date, (i) JKD paid to the Operating LLC an additional $ 2,250 and (ii) in consideration for such funds, the Operating LLC issued to JKD the Amended and Restated Note in the aggregate principal amount of $ 4,500 . See note 16.  The Company incurred interest expense on this debt, which is disclosed as part of interest expense incurred in the tale at the end of this section.   D. DGC Trust      DGC Trust has been identified as a related party because Daniel G. Cohen's children are the beneficiaries of the trust and the trust was established by Daniel G. Cohen, chairman of the Company’s board of directors and chairman of the Operating LLC board of managers.  Daniel G. Cohen does not have any voting or dispositive control of securities held in the interest of the trust.     In March 2017, the 2017 Convertible Note was issued to the DGC Trust.  The Company incurred interest expense on the 2017 Convertible Note, which is disclosed as part of interest expense incurred in the table at the end of this section. On March 20, 2022, the DGC Trust elected to convert the Note into an aggregate of 10,344,827 units of membership interests in the Operating LLC at the conversion rate specified in the Note of $ 1.45 per unit. As a result of such conversion, the Note was cancelled in its entirety and a $ 15,000 investment in non-convertible controlling interest was recorded. See note 16.   52 Table of Contents     E.  Duane Morris, LLP (“Duane Morris”)    Duane Morris is an international law firm and serves as legal counsel to the Company.  Duane Morris is considered a related party because a partner at Duane Morris is a member of the same household as a director of the Company.  Expense incurred by the Company for services provided by Duane Morris are included within professional fees and operating expense in the consolidated statements of operations and comprehensive income and are disclosed in the table below.     F. FinTech Masala, LLC    The Company engaged Betsy Cohen on behalf of FinTech Masala, LLC as a consultant to provide certain services related to the Insurance SPAC II. The Company agreed to pay a consultant fee of $ 1 per month, which commenced on October 1, 2020, and continued through February 2021.  Betsy Cohen made a $ 1  investment in the Insurance SPAC II Sponsor Entities which is included as a component of non-controlling interest in the consolidated balance sheet at December 31, 2020.   The expense incurred by the Company for the consulting services provided by FinTech Masala, LLC is included within professional fees and operating expense in the consolidated statements of operations and comprehensive income and are disclosed in the table below.    The Company engaged Betsy Cohen on behalf of FinTech Masala, LLC as a consultant to provide certain services related to the Insurance SPAC III. The Company agreed to pay a consultant fee of $ 1 per month, which commenced on December  1, 2020, and continues through  (i) the date that is thirty days following the closing of the Insurance SPAC III ’s Initial Business Combination and (ii) the date on which the Company or Betsy Cohen terminates the consulting agreement.  Betsy Cohen made a $ 1  investment in the Insurance SPAC III Sponsor Entities which is included as a component of non-controlling interest in the consolidated balance sheets.  The expense incurred by the Company for the consulting services provided by FinTech Masala, LLC is included within professional fees and operating expense in the consolidated statements of operations and comprehensive income and are disclosed in the table below.     G. Investment Vehicle and Other      FlipOs (previously Stoa USA, Inc.)   FlipOs is a related party because Daniel Cohen is a member of the board of directors of  FlipOs. As of December 31, 2021 the Company made cumulative investments of $ 566 in FlipOs.  The fair value of these investments are included in other investments, at fair value on the consolidated balance sheets; any realized and unrealized gains on these investments are included in principle transactions and other income on the consolidated statements of operations and comprehensive income. This amount is included in the table below.   CK Capital and AOI      CK Capital and AOI are related parties as they are equity method investments of the Company.  In December 2019, the Company acquired a 45 % interest in CK Capital.  The Company purchased this interest for $ 18 (of which $ 17 was paid to an entity controlled by Daniel G. Cohen).  In addition, in December 2019, the Company also acquired a 10 % interest in AOI, a real estate holding company, for $ 1 from entities controlled by Daniel G. Cohen.  Income earned, or loss incurred by the Company on the equity method investments in CK Capital and AOI is included in the tables below.  In accordance with the CK Capital shareholders agreement, the Company may receive fees for consulting services provided by the Company to CK Capital.  Any fees earned for such consulting services are included in principal transactions and other income in the table below.  See note 11.        53 Table of Contents   Insurance SPAC   II   Prior to February 9, 2021, the date of the Insurance SPAC II Merger, Insurance SPAC II was considered a related party as it was an equity method investment of the Company.  The Operating LLC, was the manager of the Insurance SPAC II Sponsor Entities and the Company consolidated the Insurance SPAC II Sponsor Entities. Prior to the Insurance SPAC II Merger, the Company owned 46.1 % of the equity in Insurance SPAC II.  Income earned, or loss incurred on the equity method investment in Insurance SPAC II is included in the table below.  The Operating LLC and Insurance SPAC II entered into an administrative services agreement, dated September 2, 2020, pursuant to which the Operating LLC and Insurance SPAC II  agreed that, commencing on the date that Insurance SPAC II’s securities were first listed on the NASDAQ Capital Market through the earlier of Insurance SPAC II’s consummation of a business combination and its liquidation, Insurance SPAC II would pay the Operating LLC $ 20  per month for certain office space, utilities, secretarial support, and administrative services.  Revenue earned by the Company from such administrative services agreement is included as part of principal transactions and other income in the tables below.  The Company also agreed to lend Insurance SPAC up to $ 750 for operating and acquisition related expenses; no amounts were borrowed from the Company and the lending agreement is no longer in place effective with the Insurance SPAC II Merger.   Insurance SPAC   III   Insurance SPAC III is a related party as it is an equity method investment of the Company.  The Operating LLC is the manager of the Insurance SPAC III Sponsor Entities and the Company consolidates the Insurance SPAC III Sponsor Entities. As of   March 31, 2022  , the Company owns 47.3%  of the equity in Insurance SPAC III Sponsor Entities. Income earned, or loss incurred on the equity method investment in Insurance SPAC III is included in the table below.  The Operating LLC and Insurance SPAC III entered into an administrative services agreement, dated December 17, 2020, pursuant to which the Operating LLC and Insurance SPAC III agreed that, commencing on the date that Insurance SPAC III’s securities were first listed on the NASDAQ Capital Market through the earlier of Insurance SPAC III’s consummation of a business combination and its liquidation, Insurance SPAC III would pay the Operating LLC $ 20  per month for certain office space, utilities, and shared personnel support as may be requested by Insurance SPAC III.  Revenue earned by the Company from the administrative services agreement is included as part of principal transactions and other income in the tables below.   The Operating LLC loaned to Insurance SPAC III approximately $ 71  to cover IPO expenses, which was repaid in full at the closing of the IPO. Insurance Acquisition Sponsor III and its affiliates, including the Operating LLC, have also committed to loan Insurance SPAC III up to an additional $ 1,500  to cover operating and acquisition related expenses following the IPO, of which $ 810  was borrowed by Insurance SPAC III as of   March 31, 2022.  In April 2022, the Operating LLC advanced an additional $ 150 to Insurance SPAC III. See note 24.   These loans will bear no interest and, if the Insurance SPAC III consummates a business combination in the required timeframe, 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 timeframe, no funds from Insurance SPAC III's trust account can be used to repay the loans.    SPAC Fund     The SPAC Fund is considered a related party because it is an equity method investment of the Company.  The Company has an investment in and a management contract with the SPAC Fund.  Income earned or loss incurred on the investment is included as part of principal transactions and other income in the tables below.  Revenue earned on the management contract is included as part of asset management in the tables below.  As of   March 31, 2022 , the Company owned 0.42 % of the equity of the SPAC Fund.    U.S. Insurance JV     U.S. Insurance JV is considered a related party because it is an equity method investment of the Company. The Company has an investment in and a management contract with the U.S. Insurance JV.  Income earned or loss incurred on the investment is included as part of principal transactions and other income in the tables below.  Revenue earned on the management contract is included as part of asset management and is shown in the tables below.  As of March 31, 2022 , the Company owned 3.1 % of the equity of the U.S. Insurance JV.   CREO JV   CREO JV is considered a related party because it is an equity method investment. The Company has an investment in and a management contract with CREO JV.  Income earned or loss incurred on the investment are included as part of principal transactions and other in come.  As of   March 31, 2022 , the Company owned 7.5 % of th e equity of CREO JV.   Sponsor Entities of Other SPACs   In general, a SPAC is initially funded by a sponsor and that sponsor invests in and receives private placement and founders shares of the SPAC.  The sponsor  may be organized as a single legal entity or multiple entities under common control.  In either case, the entity or entities is referred to in this section as the sponsor of the SPAC.  The Company has had the following transactions with various sponsors of SPACs that are related parties and which the Company does not consolidate.     Fintech Acquisition Corp. IV ("FTAC IV") was a SPAC.  The sponsor of Fintech Acquisition Corp. IV ("FTAC IV Sponsor") is a related party as it is an equity method investment of the Company.  The Company made a sponsor investment in FTAC IV Sponsor, receiving a final allocation of 81,825  founder shares of FTAC IV stock for $ 1 .  In addition, on September 29, 2020, the Operating LLC entered into a letter agreement with FTAC IV Sponsor whereby the Operating LLC will provide personnel to serve as the chief financial officer as well as other accounting and administrative services to FTAC IV Sponsor for a period not longer than 24 months.  As consideration for these services, the Company received an allocation of an additional 24,547  founders shares of FTAC IV stock to the Operating LLC and recorded an equity method investment of $ 40  for the valuation of these services. The revenue earned on this arrangement is disclosed in Principal transactions and other income, SPAC Sponsor Entities in the tables below.   54 Table of Contents   Fintech Acquisition Corp. V ("FTAC V") is a SPAC.  The sponsor of Fintech Acquisition Corp. V ("FTAC V Sponsor") is a related party as it is an equity method investment of the Company.  The Company made a sponsor investment in FTAC V Sponsor, receiving an initial allocation of 140,000 founder shares.  On December 14, 2020, the Operating LLC entered into a letter agreement with FTAC V Sponsor whereby the Operating LLC will provide personnel to serve as the chief financial officer as well as other accounting and administrative services to FTAC V Sponsor for a period not longer than 24 months.  As consideration for these services, the Company received an allocation of 35,000 founders shares of FTAC V stock to the Operating LLC and recorded an equity method investment of $ 40  for the valuation of these services. The revenue earned on this arrangement is disclosed in Principal transactions and other income, SPAC Sponsor Entities in the tables below.   Fintech Acquisition Corp. VI ("FTAC VI") is a SPAC.  The sponsor of Fintech Acquisition Corp. VI ("FTAC VI Sponsor") is a related party as it is an equity method investment of the Company.  On June 26, 2021, the Operating LLC entered into a letter agreement with FTAC VI Sponsor whereby the Operating LLC will provide personnel to serve as the chief financial officer as well as other accounting and administrative services to FTAC VI Sponsor for a period not longer than 24 months.  As consideration for these services, the Company received an allocation of 35,000 founder shares of FTAC VI stock to the Operating LLC and recorded an equity method investment of $ 40  for the valuation of these services. The revenue earned on this arrangement is disclosed in Principle transactions and other income, SPAC Sponsor Entities in the tables below.   FTAC Olympus Acquisition Corp ("FTAC Olympus") was a SPAC.  The sponsor of FTAC Olympus Acquisition Corp. ("FTAC Olympus Sponsor") is a related party as it is an equity method investment of the Company.  The Company made a sponsor investment in FTAC Olympus Sponsor, receiving a final allocation of 399,741  founders shares of FTAC Olympus stock for $ 2 .  In addition, on September 8, 2020, the Operating LLC entered into a letter agreement with FTAC Olympus Sponsor whereby the Operating LLC will provide personnel to serve as the chief financial officer as well as other accounting and administrative services to FTAC Olympus Sponsor for a period not longer than 24 months.  As consideration for these services, the Company received an allocation of an additional 19,987  founders shares of FTAC Olympus stock to the Operating LLC and recorded an equity method investment of $ 40  for the valuation of these services. The revenue earned on this arrangement is disclosed in Principal transactions and other income, SPAC Sponsor Entities in the tables below.   FTAC Athena Acquisition Corp. ("FTAC Athena") is a SPAC.  The sponsor of FTAC Athena Acquisition Corp. ("FTAC Athena Sponsor") is a related party as it is an equity method investment of the Company.  On February 26, 2021, the Operating LLC entered into a letter agreement with FTAC Athena Sponsor whereby the Operating LLC will provide personnel to serve as the chief financial officer as well as other accounting and administrative services to FTAC Athena Sponsor for a period not longer than 24 months.  As consideration for these services, the Company received an allocation of  35,000 founders shares of FTAC Athena stock to the Operating LLC and recorded an equity method investment of $ 40  for the valuation of these services. The revenue earned on this arrangement is disclosed in Principal transactions and other income, SPAC Sponsor Entities in the tables below.   FTAC Hera Acquisition Corp. ("FTAC Hera") is a SPAC.  The sponsors of FTAC Hera Acquisition Corp. ("FTAC Hera Sponsors") is a related party as it is an equity method investment of the Company.  On March 5, 2021, the Operating LLC entered into a letter agreement with FTAC Hera Sponsors whereby the Operating LLC will provide personnel to serve as the chief financial officer as well as other accounting and administrative services to FTAC Hera Sponsors for a period not longer than 24 months.  As consideration for these services, the Company received an allocation of  35,000 founders shares of FTAC Hera stock to the Operating LLC and recorded an equity method investment of $ 40  for the valuation of these services. The revenue earned on this arrangement is disclosed in Principal transactions and other income, SPAC Sponsor Entities in the tables below.   FTAC Parnassus Acquisition Corp. ("FTAC Parnassus") is a SPAC.  The sponsors of FTAC Parnassus Acquisition Corp. ("FTAC Parnassus Sponsors") is a related party as it is an equity method investment of the Company.  On March 15,  2021, the Operating LLC entered into a letter agreement with FTAC Parnassus Sponsors whereby the Operating LLC will provide personnel to serve as the chief financial officer as well as other accounting and administrative services to FTAC Parnassus Sponsors for a period not longer than 24 months.  As consideration for these services, the Company received an allocation of  35,000 founders shares of FTAC Parnassus stock to the Operating LLC and recorded an equity method investment of $ 40  for the valuation of these services. The revenue earned on this arrangement is disclosed in Principal transactions and other income, SPAC Sponsor Entities in the tables below.   Other     The Company invests in sponsor entities of SPACS, either directly or through its interest in the SPAC Series Funds, that are not otherwise affiliated with the Company but are considered related parties because they are accounted for under the equity method.  As of  March 31, 2022 , the Company owned 2.26 % of these entities in the aggregate. Income earned or loss incurred on the equity method investment in the SPAC Sponsor Entities is included in the tables below.   55 Table of Contents   The following tables display the routine transactions recognized in the consolidated statements of operations from the identified related parties that are described above.       Three Months Ended       March 31, 2022     March 31, 2021                     Asset management                 SPAC Fund   $ 282     $ 215   Other SPAC Entities           319   U.S. Insurance JV     266       91       $ 548     $ 625   Principal transactions and other income                 Insurance SPAC II   $ -     $ 40   Insurance SPAC III     60       60   FlipOS     ( 308 )     -   Other SPAC Entities     25       15   SPAC Fund     ( 55 )     478   U.S. Insurance JV     80       162   CREO     80       -       $ ( 118 )   $ 755   Income (loss) from equity method affiliates                 Dutch Real Estate Entities   $ ( 8 )   $ ( 132 ) Insurance SPAC II     -       ( 107 ) Insurance SPAC III     ( 589 )     ( 454 ) Other SPAC Entities     ( 11,507 )     ( 142 )     $ ( 12,104 )   $ ( 835 )                   Operating expense (income)                 Duane Morris   $ 142     $ 398   FinTech Masala, LLC     ( 18 )     ( 8 )     $ 124     $ 390   Interest expense (income)                 CBF   $ -     $ 197   DGC Trust     327       375   EBC     -       71   JKD Investor     271       592       $ 598     $ 1,235       The following related party transactions are non-routine and are not included in the tables above.   H.  Directors and Employees   The Company has entered into employment agreements with Daniel G. Cohen and Joseph W. Pooler, Jr., its chief financial officer.  The Company has entered into its standard indemnification agreement with each of its directors and executive officers.   The Company maintains a 401 (k) savings plan covering substantially all of its employees.  The Company matches 50 % of employee contributions for all participants not to exceed 3 % of their salary.  Contributions made on behalf of the Company were $ 101  for the  three months ended March 31, 2022 .  Contributions made on behalf of the Company were $ 95  for the three months ended March 31, 2021 .     The Company leases office space from Zucker and Moore, LLC.  Zucker and Moore, LLC is partially owned by Jack DiMaio, Jr., the vice chairman of the Company’s board of directors.  The lease agreement automatically renews each in June unless it is terminated with 120 days' notice. The Company recorded $ 24 of rent expense related to this office space for the three months ended March 31, 2022 and 2021 , respectively.   56 Table of Contents     24 . DUE FROM / DUE TO RELATED PARTIES   Amounts due to related parties related to redeemable financial instruments and outstanding debt are included as components of those balances in the consolidated balance sheets.  Also, interest or investment return owed on those balances are included as a component of accounts payable and other in the consolidated balance sheets.  Any investment made in an equity method affiliate for which the Company does not elect the fair value option is included as a component of investments in equity method affiliates in the consolidated balance sheets.  Any investment made in an equity method affiliate for which the Company elected the fair value option is included as a component of other investments, at fair value in the consolidated balance sheets.   The following table summarizes amounts due from / to related parties as of each date shown. These amounts may result from normal operating advances, employee advances, or from timing differences between the transactions disclosed in note 23  and final settlement of those transactions in cash. All amounts are primarily non-interest bearing.   DUE FROM/DUE TO RELATED PARTIES (Dollars in Thousands)       March 31, 2022     December 31, 2021   CK Capital   $ -     $ 137   U.S. Insurance JV     213       147   Insurance SPAC III     810       500   SPAC Fund     446       3,653   Employee & other     236       144   Due from related parties   $ 1,705     $ 4,581     57 Table of Contents         ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.    The following discussion and analysis of the consolidated financial condition and results of operations of Cohen & Company Inc. and its majority owned subsidiaries (collectively, “we,” “us,” “our,” or the “Company”) should be read in conjunction with the unaudited consolidated financial statements and the notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.   “Management’s Discussion and Analysis of Financial Condition and Results of Operations” is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On a regular basis, we evaluate these estimates, including fair value of financial instruments. These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.   All amounts in this disclosure are in thousands (except share and unit and per share and per unit data) except where noted.   Overview   We are a financial services company specializing in fixed income markets. We were founded in 1999 as an investment firm focused on small-cap banking institutions, but have grown to provide an expanding range of capital markets and asset management services. We are organized into three business segments: Capital Markets, Asset Management, and Principal Investing.     ●  Capital Markets :  Our Capital Markets business segment consists primarily of fixed income sales, trading, matched book repo financing, new issue placements in corporate and securitized products, and advisory services. Our fixed income sales and trading group provides trade execution to corporate investors, institutional investors, mortgage originators, and other smaller broker-dealers. We specialize in a variety of products, including but not limited to: corporate bonds, ABS, MBS, RMBS, CDOs, CLOs, CBOs, CMOs, municipal securities, TBAs and other forward agency MBS contracts, U.S. government bonds, U.S. government agency securities, brokered deposits and CDs for small banks, and hybrid capital of financial institutions including TruPS, whole loans, and other structured financial instruments. We also offer execution and brokerage services for equity products. We carry out our capital markets activities primarily through our subsidiaries: JVB in the United States and CCFESA in Europe.  A division of JVB, Cohen & Company Capital Markets is our full-service boutique investment banking platform focusing on SPAC advisory, capital markets advisory, and M&A advisory, with clients primarily in the financial technology (commonly referred to as "fintech") and SPAC spaces.     ●  Asset Management:   Our Asset Management business segment manages assets within CDOs, managed accounts, joint ventures, and investment funds (collectively, “Investment Vehicles”). A CDO is a form of secured borrowing. The borrowing is secured by different types of fixed income assets such 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. Our Asset Management business segment includes our fee-based asset management operations, which include on-going base and incentive management fees. As of March 31, 2022, we had approximately $2.27 billion in assets under management (“AUM”) of which 51.8% was in CDOs. A substantial portion of our asset management revenue is earned from the management of CDOs.  We have not completed a new securitization since 2008.  As a result, our asset management revenue has declined from its historical highs as the assets of the CDOs decline due to maturities, repayments, auction call redemptions, and defaults.  Our ability to complete securitizations in the future will depend upon, among other things, our asset origination capacity and success, our ability to arrange warehouse financing to originate assets, our willingness and capacity to fund required amounts to obtain warehouse financing and securitized financings, and the demand in the markets for such securitizations.  The remaining portion of our AUM is from a diversified mix of other Investment Vehicles that were more recently formed.     ●  Principal Investing : Our Principal Investing business segment is comprised of investments that we hold related to our SPAC franchise and other investments have made for the purpose of earning an investment return rather than investments to support our trading, matched book repo, or other Capital Markets business segment activities.  These investments are a component of our other investments, at fair value, other investments sold, not yet purchased, and investments in equity method affiliates in our consolidated balance sheet.     We generate our revenue by business segment primarily through the following activities.    Capital Markets:       ●  Our trading activities, which include execution and brokerage services, securities lending activities, riskless trading activities, as well as gains and losses (unrealized and realized) and income and expense earned on securities and derivatives classified as trading or trading securities sold, not yet purchased;   ●  Net interest income on our matched book repo financing activities; and   ●  New issue and advisory revenue comprised primarily of (a) new issue revenue associated with originating, arranging, or placing newly created financial instruments and (b) revenue from advisory services.    Asset Management:     ●  Asset management fees for our on-going asset management services provided to certain Investment Vehicles, which may include fees both senior and subordinate to the securities issued in the Investment Vehicle; and   ●  Incentive management fees earned based on the performance of Investment Vehicles.   Principal Investing:     ●  Gains and losses (unrealized and realized) and income and expense earned on securities classified as other investments, at fair value and other investments sold, not yet purchased.   ●  Income and loss earned on equity method investments.   58 Table of Contents   Business Environment   Our business in general and our Capital Markets business segment in particular, do not produce predictable earnings.  Our results can vary dramatically from year to year and quarter to quarter.  Our business is materially affected by economic conditions in the financial markets, political conditions, broad trends in business and finance, the housing and mortgage markets, changes in volume and price levels of securities transactions, and changes in interest rates, including overnight funding rates, all of which can affect our profitability and are unpredictable and beyond our control. These factors may affect the financial decisions made by investors and companies, including their level of participation in the financial markets and their willingness to participate in corporate transactions. Severe market fluctuations or weak economic conditions could reduce our trading volume and revenues, negatively affect our ability to generate new issue and advisory revenue, and adversely affect our profitability.  As a general rule, our trading business benefits from increased market volatility.  Increased volatility usually results in increased activity from our clients and counterparties.  However, periods of extreme volatility may at times result in clients reducing their trading volumes, which would negatively impact our results.  Also, periods of extreme volatility may result in large fluctuations in securities valuations and we may incur losses on our holdings.  Also, our mortgage group’s business benefits when mortgage volumes increase, and may suffer when mortgage volumes decrease.  Among other things, mortgage volumes are significantly impacted by changes in interest rates.    In addition, as a smaller firm, we are exposed to intense competition.  Although we provide financing to our customers, larger firms have a much greater capability to provide their clients with financing, giving them a competitive advantage.  We are much more reliant upon our employees’ relationships, networks, and abilities to identify and capitalize on market opportunities.  Therefore, our business may be significantly impacted by the addition or loss of key personnel.  We try to address these challenges by (i) focusing our business on clients and asset classes that are underserved by the large firms, (ii) continuing to monitor our fixed costs to enhance operating leverage and limit our losses during periods of low volumes, and (iii) attempting to hire and retain entrepreneurial and effective traders, investment bankers, and salespeople. Our business environment is rapidly changing.  New risks and uncertainties emerge continuously and it is not possible for us to predict all the risks we will face.  This may negatively impact our operating performance.    A portion of our revenue is generated from net trading activity. We engage in proprietary trading for our own account, provide securities financing for our customers, and execute “riskless” trades with a customer order in hand resulting in limited market risk to us. The inventory of securities held for our own account, as well as held to facilitate customer trades, and our market making activities are sensitive to market movements.  A portion of our revenue is generated from new issue and advisory engagements. The fees charged and volume of these engagements are sensitive to the overall business environment.  We provide investment banking and advisory services in Europe through our subsidiary CCFESA and new issue and advisory services in the U.S. through our subsidiary JVB. A division of JVB, Cohen & Company Capital Markets is our full-service boutique investment banking platform focusing on SPAC advisory, capital markets advisory, and M&A advisory, with clients primarily in the financial technology (commonly referred to as "fintech") and SPAC spaces.  Currently, our primary source of new issue and advisory revenue is from originating assets for our U.S. and European insurance asset management business, and from investment banking and advisory services through our Cohen & Company Capital Markets platform.   A portion of our revenue is generated from management fees. Our ability to charge management fees and the amount of those fees is dependent upon the underlying investment performance and stability of the Investment Vehicles. If these types of investments do not provide attractive returns to investors, the demand for such instruments will likely fall, thereby reducing our opportunity to earn new management fees or maintain existing management fees.  As of March 31, 2022, 51.8% of our existing AUM were in CDOs. The creation of CDOs has depended upon a vibrant securitization market. Since 2008, volumes within the securitization market have dropped significantly and have not fully recovered since that time. We have not completed a new securitization since 2008. The remaining portion of our AUM is from a diversified mix of other Investment Vehicles most of which were more recently formed.    A substantial portion of our asset management revenue is earned from the management of CDOs.  As a result, our asset management revenue has declined from its historical highs as the assets of the CDOs decline due to maturities, repayments, auction call redemptions, and defaults.  Our ability to complete securitizations in the future will depend upon, among other things, our asset origination capacity and success, our ability to arrange warehouse financing to originate assets, our willingness and capacity to fund required amounts to obtain warehouse financing and securitized financings, and the demand in the markets for such securitizations.   A portion of our revenues is generated from our principal investing activities. Therefore, our revenues are impacted by the overall market supply and demand of these investments as well as the individual performance of each investment. Our principal investments are included within other investments, at fair value, other investments sold, not yet purchased, and investments in equity method affiliates in our consolidated balance sheets.  More recently, a significant component of our principal investment revenue has come from SPAC related equity investments, primarily in entities that have been the result of sponsored SPAC business combinations or related party sponsored SPAC business combinations.  Access to these investments is reliant on a robust SPAC market.  Performance of the resulting principal investments can be materially impacted by overall performance of the equity markets.  See note 7 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.    The SPAC Market   Beginning in 2018, we began sponsoring a series of SPACs.  Each sponsored SPAC either completed or seeks to complete a business combination with a company involved in the insurance market.  In addition, we invest in other SPACs at various stages of their business life cycle.  Beginning in 2019, these SPAC activities have become a significant portion of our Principal Investing business segment. In August 2018, we invested in and became the general partner of a newly formed investment fund (the “SPAC Fund”), which was created for the purpose of investing in the equity interests of SPACs and SPAC sponsor entities including SPACs sponsored by us, our affiliates, and third parties. As a complement to the SPAC Fund, we established and became manager of two newly formed umbrella limited liability companies (the “SPAC Series Funds”) that issue a separate series of interest for each investment portfolio, which typically consists of investments in the sponsor entities of individual SPACs.  Generally, when a SPAC acquires or merges with a privately held target company, the target company winds up owning a majority of the resulting outstanding equity of the SPAC so the transaction is accounted for as a reverse merger.  Private companies utilize reverse mergers with SPACs as a method of going public as an alternative to a traditional IPO.  All of our business activity related to SPACs is highly sensitive to the volume of activity in the SPAC market.  Volumes could be negatively impacted if target companies no longer see SPACs as an attractive alternative thereby reducing the number of suitable potential business combination targets.  Also, investor demand for SPACs would be negatively impacted if the stock of SPACs that successfully complete a business combination underperform the market.  If volumes of SPAC activity decline, our results of operations will likely be significantly negatively impacted.     Equity prices of SPACs and post business combination SPACs declined significantly during the first quarter of 2022.  We are exposed to public equity prices of SPACs and post business combination SPACs both through our other investments, at fair value and investments in equity method affiliates.  As a result, we recorded significant principal transaction losses and equity method losses during the three months ended March 31, 2022.  Continued declines in the equity prices of these companies will result in further losses for us.     59 Table of Contents   Margin Pressures in Fixed Income Brokerage Business   Performance in the financial services industry in which we operate is highly correlated to the overall strength of the economy and financial market activity. Overall market conditions are a product of many factors beyond our control and can be unpredictable. These factors may affect the financial decisions made by investors, including their level of participation in the financial markets. In turn, these decisions may affect our business results. With respect to financial market activity, our profitability is sensitive to a variety of factors including the volatility of the equity and fixed income markets, the level and shape of the various yield curves, and the volume and value of trading in securities.      Margins and volumes in certain products and markets within the fixed income brokerage business continue to decrease materially as competition has increased and general market activity has declined. Further, we continue to expect that competition will increase over time, resulting in continued margin pressure.   Our response to this margin compression has included: (i) building a diversified fixed income trading platform; (ii) acquiring or building out new product lines and expanding existing product lines; (iii) building a hedging execution and funding operation to service mortgage originators; and (iv) monitoring our fixed costs. Our cost management initiatives are ongoing. However, there can be no certainty that these efforts will be sufficient. If insufficient, we will likely see a decline in profitability.   U.S.  Housing Market   In recent years, our mortgage group has grown in significance to our Capital Markets segment and our company overall.  The mortgage group primarily earns revenue by providing hedging execution, securities financing, and trade execution services to mortgage originators and other investors in mortgage-backed securities.  Therefore, this group’s revenue is highly dependent on the volume of mortgage originations in the U.S.  Origination activity is highly sensitive to interest rates, the U.S. job market, housing starts, sale activity of existing housing stock, as well as the general health of the U.S. economy.  In addition, any new regulation that impacts U.S. government agency mortgage-backed security issuance activity, residential mortgage underwriting standards, or otherwise impacts mortgage originators will impact our business.  We have no control over these external factors and there is no effective way for us to hedge against these risks.  Our mortgage group’s volumes and profitability will be highly impacted by these external factors.   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. 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 we cannot fully assess the impact COVID-19 will have on all of our operations at this time, there are certain impacts that we have identified:     ●  The volatility of the financial markets experienced since March 2020 as a result of the COVID-19 pandemic, has caused us 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.  We have determined that at our pre-pandemic levels in these businesses, we were exposed to a higher level of counterparty credit risk than we should have and were experiencing too much volatility in our available liquidity to conservatively meet capital requirements and margin calls in these businesses.  We expect 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 us to reassess the goodwill we had recorded related to JVB under the guidance of ASC 350.  We determined that the fair value of JVB was less than the carrying value (including the goodwill).  As a result, we recorded an impairment loss of $7,883 during 2020.  See note 12 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.  See discussion below regarding wind down of GCF repo business.     ●  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 broad improvements in the global fight against the COVID-19 virus, we will likely be impacted by the pandemic in other ways which we cannot reliably determine.  We will continue to monitor market conditions and respond accordingly.  In April 2020, we applied for and received a $2,166 loan under the Paycheck Protection Program ("PPP") of the Coronavirus Aid, Relief, and Economic Security ("CARES") Act.  On June 21, 2021, we received notification that the U.S. Small Business Administration, as administrator of the PPP, had approved the our PPP Loan forgiveness application for $2,127 and all accrued interest on the PPP Loan, leaving us with a remaining PPP Loan balance of $39. The PPP Loan forgiveness was recorded to other non-operating income on the consolidated statements of operations and comprehensive income.  We repaid the remaining balance plus accrued interest on June 25, 2021, at which point the PPP Loan balance was reduced to zero.     60 Table of Contents   Recent Events   The 2017 Convertible Note On March 10, 2017, the Operating LLC issued to DGC Family Fintech Trust (the “DGC Trust”), a trust established by Daniel G. Cohen, a convertible senior secured promissory note in the aggregate principal amount of $15,000 (the "2017 Convertible Note"). The 2017 Convertible Note was originally scheduled to mature on March 10, 2022; however in accordance with the terms and conditions of the 2107 Convertible Note agreement, effective on March 10, 2022, the Operating LLC exercised its right to extend the maturity date from March 10, 2022 to March 10, 2023.  On March 20, 2022, the DGC Trust elected to convert the 2017 Convertible Note into an aggregate of 10,344,827 units of membership interests in the Operating LLC at the conversion rate specified in the 2017 Convertible Note agreement of $1.45 per unit. As a result of such conversion, the 2017 Convertible Note was cancelled in its entirety.  These units of membership interests have same conversion and redemption rights as the existing convertible non-controlling interest units.  See note 21 to the Company's December 31, 2021 Annual Report filed on Form 10-K.   Pursuant to the DGC Trust’s governing documents, Daniel G. Cohen has the ability to acquire at any time any of the DGC Trust’s assets, including the units of membership interest, by substituting other property of an equivalent value without the approval or consent of any person, including any trustee or beneficiary of the DGC Trust. see Notes 16 and 23 to our consolidated financial statements included this Quarterly Report on Form 10-Q The 2020 Senior Note s On January 31, 2022, the Operating LLC and JKD Investor entered into a Note Purchase Agreement  pursuant to which, among other things, on such date, (i) JKD Investor paid to the Operating LLC an additional $2,250 and (ii) in consideration for such funds, the Operating LLC issued to JKD Investor an Amended and Restated Senior Promissory Note in the aggregate principal amount of $4,500 (the “Amended and Restated Note”), which Amended and Restated Note amended and restated the JKD Note in its entirety.  The 2022 Purchase Agreement contains customary representations and warranties on the part of each of JKD Investor and the Operating LLC.  We used these proceeds to retire $2,250 of existing 2020 Senior Notes held by RNCS.  See note 16 to our consolidated financial statements included this Quarterly Report on Form 10-Q New   Commercial Real Estate Opportunities ( “ CREO ” ) JV On September 3, 2021, we committed to invest up to $15,000 of equity in a newly formed joint venture (the “CREO JV”) with an outside investor who committed to invest approximately $435,000 of equity in the CREO JV.  We are required to invest 7.5% of the total equity of the CREO JV with an absolute limit of $15,000. The CREO JV is managed by us. The CREO JV was formed for the purposes of investing in primarily multi-family commercial real estate mortgage-backed loans and below-investment-grade rated tranches in CRE CLOs collateralized by mostly transitional commercial real estate mortgage-backed loans. “CRE CLO” means any pooling of commercial real estate mortgage-backed loans into a collateralized loan obligation. The commercial real estate loans that will be funded by the CREO JV may be originated by us and we may earn origination fees earned in connection with such transactions. In addition, the Company may earn structuring fees in connection with structuring and consummating a CRE CLO consisting of a pooling of commercial real estate loans. We also may earn management fees as manager of any CRE CLOs based on the value of the assets consolidated into a CRE CLO (calculated in accordance with the terms of such CRE CLO), payable from the proceeds generated by and in accordance with the distribution waterfall of such CRE CLO. We have elected the fair value option in accordance with the provisions of FASB ASC 820,  Fair Value Measurements  (“FASB ASC 820”) to account for our investment in the CREO JV.  The investment is included in other investments at fair value, on the consolidated balance sheet and gains and losses (both realized and unrealized) are recognized in the consolidated statement of operations as a component of principal transactions and other income.  Because the CREO JV has the attributes of investment companies as described in FASB ASC 946-15-2, we estimate the fair value of our investment using the net asset value (“NAV”) per share (or its equivalent) as of the reporting date in accordance with the “practical expedient” provisions related to investments in certain entities that calculate net asset value per share (or its equivalent) included in FASB ASC 820 for all entities. As of March 31, 2022, our investment balance in the CREO was $6,617. Wind Down of the Company's GCF Repo Business The Company has carried out a matched book GCF repo business as a full netting member of the FICC Government Services Division since 2017.  In October 2021, primarily due to reduced spreads in the repo market for GCF collateral, the Company decided to wind down this business.  As of December 31, 2021, the wind down was completed and the GCF reverse repurchase agreements and repurchase agreements balances were reduced to zero. See note 10 to our consolidated financial statements included in this Quarterly Report on Form 10-Q.    61 Table of Contents   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”). The Insurance SPAC III Sponsor Entities are sponsors of INSU Acquisition Corp. III ("Insurance SPAC III"). On December 22, 2020, Insurance SPAC 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 Insurance SPAC III's Class A common stock, par value $0.0001 per share (“Insurance SPAC III Common Stock”), and one-third of one Insurance SPAC III warrant (each, an “Insurance SPAC III Warrant”), wher e 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 Insurance SPAC III 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 placement units in Insurance SPAC III 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 the 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 the 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 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 Insurance SPAC III’s public shares issued in the IPO if the 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 in Insurance SPAC III.  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 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 founder 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 Insurance SPAC III’s founder shares currently allocated to the Operating LLC is 4,267,500, 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 $1,500 to cover operating and acquisition related expenses following the IPO, of which $810 was borrowed by Insurance SPAC III as of  March 31, 2022. In April 2022, the Operating LLC advanced an additional $150 to Insurance SPAC III. See note 24.  These loans will bear no interest and, if the Insurance SPAC III consummates a business combination in the required timeframe, 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 timeframe, no funds from Insurance SPAC III's trust account can be used to repay the loans.  As of March 31, 2022, we had a total equity method investment in Insurance SPAC III of $3,954, which was included as a component of investment in equity method affiliates in our consolidated balance sheet.  Partially offsetting this amount was non-controlling interest of $4,511, which was included as a component of non-controlling interest in our consolidated balance sheet.  Therefore, the net carrying value of our investment in Insurance SPAC III (excluding its advances under our loan agreement) was $(557) as of March 31, 2022.   62 Table of Contents     Consolidated Results of Operations   This section provides a comparative discussion of our consolidated results of operations for the specified periods. The period-to-period comparisons of financial results are not necessarily indicative of future results.     Three Months Ended March 31, 2022 Compared to the Three Months Ended March 31, 2021   The following table sets forth information regarding our consolidated results of operations for the three months ended March 31, 2022 and 2021.        COHEN & COMPANY INC. CONSOLIDATED  STATEMENTS OF OPERATIONS (Dollars in Thousands) (Unaudited)       Three Months Ended March 31,     Favorable / (Unfavorable)       2022     2021     $ Change     % Change   Revenues                                 Net trading   $ 12,022     $ 19,183     $ (7,161 )     (37 %) Asset management     1,889       2,093       (204 )     (10 %) New issue and advisory     3,770       1,839       1,931       105 % Principal transactions and other income (loss)     (18,363 )     79,561       (97,924 )     (123 %) Total revenues     (682 )     102,676       (103,358 )     (101 %)                                   Operating expenses                                 Compensation and benefits     13,879       26,647       12,768       48 % Business development, occupancy, equipment     1,248       719       (529 )     (74 %) Subscriptions, clearing, and execution     1,941       2,790       849       30 % Professional fee and other operating     1,996       1,994       (2 )     0 % Depreciation and amortization     132       81       (51 )     (63 %) Total operating expenses     19,196       32,231       13,035       40 %                                   Operating income / (loss)     (19,878 )     70,445       (90,323 )     (128 %)                                   Non-operating income / (expense)                                                                   Interest expense, net     (1,351 )     (2,014 )     663       33 % Income / (loss) from equity method affiliates     (12,104 )     (835 )     (11,269 )     (1,350 %) Income / (loss) before income taxes     (33,333 )     67,596       (100,929 )     (149 %) Income tax expense / (benefit)     1,833       868       (965 )     (111 %) Net income / (loss)     (35,166 )     66,728       (101,894 )     (153 %) Less: Net income (loss) attributable to the non-convertible non-controlling interest     (14,704 )     29,970       44,674       149 % Enterprise net income / (loss)     (20,462 )     36,758       (57,220 )     (156 %) Less: Net income (loss) attributable to the convertible non-controlling interest     (12,850 )     27,403       40,253       147 % Net income / (loss) attributable to Cohen & Company Inc.   $ (7,612 )   $ 9,355       (16,967 )     (181 %)     Revenues   Revenues decreased by $103,358 or 101% to ($682) for the three months ended March 31, 2022 from $102,676 for the three months ended March 31, 2021. As discussed in more detail below, the change was comprised of (i) a decrease of $7,161 in net trading revenue; (ii) a decrease of $204 in asset management revenue; (iii) an increase in new issue and advisory of $1,931 ; and (iv) a decrease of $97,924 in principal transactions and other income.   63 Table of Contents   Net Trading   Net trading revenue decreased by $7,161 or 37%, to $12,022 for the three months ended March 31, 2022 from $19,183 for the three months ended March 31, 2021.  The following table shows the detail by group.       NET TRADING (Dollars in Thousands)       Three Months Ended March 31,       2022     2021     Change   Mortgage   $ 1,477     $ 2,550     $ (1,073 ) Matched book repo     9,772       11,281       (1,509 ) High yield corporate     976       3,331       (2,355 ) Investment grade corporate     430       8       422   Wholesale and other     (633 )     2,013       (2,646 ) Total   $ 12,022     $ 19,183     $ (7,161 )   Our net trading revenue includes unrealized gains on our trading investments as of the applicable measurement date that may never be realized due to changes in market or other conditions not in our control.  This may adversely affect the ultimate value realized from these investments. In addition, our net trading revenue also includes realized gains on certain proprietary trading positions. Our ability to derive trading gains from such trading positions is subject to overall market conditions. Due to volatility and uncertainty in the capital markets, the net trading revenue recognized may not be indicative of future results. Furthermore, from time to time, some of the assets included in the investments-trading line of our consolidated balance sheets represent level 3 valuations within the FASB valuation hierarchy. Level 3 assets are carried at fair value based on estimates derived using internal valuation models and other estimates. See notes 7, 8, and 9 to our consolidated financial statements included in this Quarterly Report on Form 10-Q. The fair value estimates made by us may not be indicative of the final sale price at which these assets may be sold.  We consider our matched book repo business to be subject to significant concentration risk.  See note 10 to our consolidated financial statements included in this Quarterly Report on Form 10-Q.   64 Table of Contents   Asset Management   Our AUM equals the sum of (1) the gross assets included in CDOs that we have sponsored and manage; plus (2) the NAV of investment funds we manage; plus the NAV or gross assets of other accounts we manage.  Our calculation of AUM may differ from the calculations used by other asset managers and, as a result, this measure may not be comparable to similar measures presented by other asset managers.  This definition of AUM is not necessarily identical to a definition of AUM that may be used within our investment agreements.       As of March 31,     As of December 31,       2022     2021     2021     2020   Company sponsored CDOs   $ 1,174,830     $ 1,631,839     $ 1,239,988     $ 2,057,178   Other Investment Vehicles (1)     1,091,816       777,304       1,118,162       712,028   Assets under management (2)   $ 2,266,646     $ 2,409,143     $ 2,358,150     $ 2,769,206     (1) Other Investment Vehicles represent any investment vehicles that are not company sponsored CDOs. (2) In some cases, accounts we manage may employ leverage.  In some cases, our fees are based on gross assets and in some cases on net assets.  Finally, in the case of the CREO JV and the SPAC Series Funds there are no management fees earned.  AUM included herein is calculated using either gross or net assets of each managed account or CDO based on whichever serves as the basis for our management fees. In the case where no management fees are earned, the net assets are included.       Asset management fees decreased by $204, or 10%, to $1,889 for the three months ended March 31, 2022 from $2,093 for the three months ended March 31, 2021, as discussed in more detail below. The following table provides a more detailed comparison of the two periods.      ASSET MANAGEMENT (Dollars in Thousands)       Three Months Ended March 31,       2022     2021     Change   CDOs   $ 494     $ 790     $ (296 ) Other     1,395       1,303       92   Total   $ 1,889     $ 2,093     $ (204 )   CDOs   A significant portion of our asset management revenue is earned from the management of CDOs.  As a result, our asset management revenue has declined from its historical highs as the assets of the CDOs decline due to maturities, repayments, auction call redemptions, and defaults.  Our ability to complete securitizations in the future will depend upon, among other things, our asset origination capacity and success, our ability to arrange warehouse financing to originate assets, our willingness and capacity to fund required amounts to obtain warehouse financing and securitized financings, and the demand in the markets for such securitizations.  Asset management fees from CDOs declined mainly due to a decline in AUM due to CDO auctions, our removal as manager of one CDO, and principal paydowns of collateral.  Asset management fees from other remained flat.       65 Table of Contents   New Issue and Advisory   New issue and advisory revenue increased by $1,931 to $3,770 for the three months ended March 31, 2022, as compared to $1,839 for the three months ended March 31, 2021.  The following table summarizes new issue revenue by business line.         Three Months Ended March 31,       2022     2021     Change   Cohen & Company Capital Markets   $ 1,533     $ -     $ 1,533   Commercial Real Estate Originations     1,037       -       1,037   US Insurance Originations     1,200       750       450   Europe Insurance Originations     -       1,089       (1,089 ) Total   $ 3,770     $ 1,839     $ 1,931     Our revenue earned from new issue and advisory has been, and we expect will continue to be, volatile. We earn revenue from a limited number of engagements. Therefore, a small change in the number of engagements can result in large fluctuations in the revenue recognized. Further, even if the number of engagements remains consistent, the average revenue per engagement can fluctuate considerably. Finally, our revenue is generally earned when an underlying transaction closes (rather than on a monthly or quarterly basis). Therefore, the timing of underlying transactions increases the volatility of our revenue recognition.    In addition, we often incur certain costs related to new issue engagements.  These costs are included as a component of either subscriptions, clearing and execution, or professional fees and other and will generally be recognized in the same period that the related revenue is recognized.    Cohen & Company Capital Markets, a division of JVB, is our full-service boutique investment banking platform focusing on SPAC advisory, capital markets advisory, and M&A advisory, which generates new issue placement and advisory revenue from clients primarily in the financial technology (commonly referred to as "fintech") and SPAC spaces, further expanding our SPAC capabilities.  In addition, we generate new issue revenue by originating new assets for the U.S. Insurance JV, CREO JV, and for our PriDe funds in Europe.    66 Table of Contents   Principal Transactions and Other Income (Loss)   Principal transactions and other income (loss)  decreased by $97,924, or 123%, to ($18,363) for the three months ended March 31, 2022, as compared to $79,561 for the three months ended March 31, 2021.  The following table summarizes principal transactions and other income by category.        PRINCIPAL TRANSACTIONS & OTHER INCOME (Dollars in Thousands)       Three Months Ended March 31,       2022     2021     Change   SFT   $ (2,053 )   $ 3,662     $ (5,715 ) MILE     (2,185 )     73,193       (75,378 ) IMXI     -       (123 )     123   WEJO     (1,617 )     -       (1,617 ) REE     (3,470 )     -       (3,470 ) ML     (122 )     -       (122 ) BKSY     (93 )     -       (93 ) HLGN     (8,248 )     -       (8,248 ) PAYO     (807 )     -       (807 ) PWP     (254 )     -       (254 ) SPAC Fund     (55 )     478       (533 ) US Insurance JV     80       163       (83 ) CREO JV     80       -       80   Other principal investments     180       1,926       (1,746 ) Total principal transactions     (18,564 )     79,299       (97,863 )                           IIFC revenue share     114       159       (45 ) All other income / (loss)     87       103       (16 ) Other income     201       262       (61 )                           Principal transactions and other income (loss)   $ (18,363 )   $ 79,561     $ (97,924 )   Principal Transactions     For all investments discussed below, see note 8 to our consolidated financial statements included in this Quarterly Report on Form 10-Q for information about how we determine the value of these instruments.    SFT is a publicly traded company.  The shares of SFT we hold are comprised of both unrestricted and restricted shares and are carried at fair value.  As of the beginning of 2021, we held most of our SFT shares in the Insurance SPAC Sponsor Entities, which were not wholly owned subsidiaries of the Operating LLC.  As of March 31, 2022, all SFT shares held by us were held by the Operating LLC.  See non-controlling interest discussion below.     MetroMile is a publicly traded company.  The shares of MILE we hold are comprised of restricted shares and are carried at fair value.  As of the beginning of 2021, we held most of our MILE shares in the Insurance SPAC II Sponsor Entities, which were not wholly owned subsidiaries of the Operating LLC.  As of March 31, 2022, all MILE shares held by us were held by the Operating LLC.  See compensation and non-controlling interest discussions below.     IMXI represents equity positions of International Money Express, Inc. (NASDAQ: IMXI), a publicly traded company that resulted from the merger of Intermex Holdings, LLC and FinTech Acquisition Corp. II.  As of March 31, 2022, we hold no investment in IMXI.  This investment was carried at fair value.    WEJO represents equity positions of Wejo Group, Ltd. (NASDAQ: WEJO), a publicly traded company that closed its business combination with Virtuoso Acquisition Corp.  As of March 31, 2022, we have no investment in WEJO carried at fair value and included as a component of other investment's at fair value.  We have investments in the sponsor of WEJO that are accounted for as equity method affiliates.  See Income / (loss) from Equity Method Affiliates  below and note 11 to our consolidated financial statements included in this Quarterly Report on Form 10-Q.     REE represents equity positions of REE Automotive Ltd. (NASDAQ: REE), a publicly traded company that closed its business combination with 10X Capital Venture Acquisition Corp.  As of March 31, 2022, we have a total investment in REE carried at fair value of $1,805 which is included as a component of other investments at fair value.     ML represents equity positions of MoneyLion, Inc. (NYSE: ML), a publicly traded company that closed its business combination with Fusion Acquisition Corp.  As of March 31, 2022, we have a total investment in ML carried at fair value of $201 which is included as a component of other investments at fair value.     BKSY represents equity positions of Blacksky Technologies, Inc that closed its business combination with Osprey Technologies Acquisition Corp.  As of March 31, 2022, we have a total investment in BKSY carried at fair value of $68 which is included as a component of other investments at fair value.     Heliogen, Inc. (NYSE: HLGN) is a public company that closed its business combination with Athena Technology Acquisition Corp.  As of March 31, 2022, we have a total investment in HLGN carried at fair value of $9,642 which is included as a component of other investments at fair value.  We also have investments in the sponsor of HLGN that are accounted for as equity method affiliates.  See Income / (loss) from Equity Method Affiliates  below and note 11 to our consolidated financial statements included in this Quarterly Report on Form 10-Q.     Payoneer Global, Inc. (NASDAQ: PAYO) is a public company that closed its business combination with FTAC Olympus Acquisition Corp. SPAC.  As of March 31, 2022, we have a total investment in PAYO carried at fair value of $1,243 which is included as a component of other investments at fair value.     67 Table of Contents   Parella Weinberg Partners (NASDAQ: PWP) is a public company that closed its business combination with FTAC IV Acquisition Corp. SPAC.  As of March 31, 2022, we have a total investment in PWP carried at fair value of $714 which is included as a component of other investments at fair value.     The SPAC Fund invests in the equity of SPACs.  We carry our investment in the fund at its reported NAV.     The US Insurance JV invests in insurance company debt.  We carry our investment in the fund at its reported NAV.     CREO JV invests in commercial real estate debt.  We carry our investment in the fund at its reported NAV.     Other principal investments consist of realized and unrealized gains and losses from other investments reported at fair value.    Other Income   Other income / (loss) is comprised of an ongoing revenue share arrangement as well as other miscellaneous operating income items. The revenue share arrangement noted in the table above entitles us to a percentage of revenue earned by IIFC.  The IIFC revenue share arrangement expires at the earlier of (i) the dissolution of IIFC or (ii) when we have earned a cumulative $20,000 in revenue share payments.  To date, we have earned $3,955.  Also, in any particular year, the revenue share earned by us cannot exceed $2,000.    68 Table of Contents   Operating Expenses   Operating expenses decreased by $13,035, or 40%, to $19,196 for the three months ended March 31, 2022 from $32,231 for the three months ended March 31, 2021. As discussed in more detail below, the change was comprised of (i) a decrease of $12,768 in compensation and benefits; (ii) an increase of $529 in business development, occupancy, and equipment; (iii) a decrease of $849 in subscriptions, clearing, and execution; (iv) an increase of $2 of professional fee and other operating; and (v) an increase of $51 of depreciation and amortization.   Compensation and Benefits   Compensation and benefits decreased by $12,768, or 48%, to $13,879 for the three months ended March 31, 2022 from $26,647 for the three months ended March 31, 2021.   COMPENSATION AND BENEFITS (Dollars in Thousands)       Three Months Ended March 31,       2022     2021     Change   Cash compensation and benefits   $ 12,775     $ 13,006     $ (231 ) Equity-based compensation     1,104       13,641       (12,537 ) Total   $ 13,879     $ 26,647     $ (12,768 )   Cash compensation and benefits in the table above was primarily comprised of salary, incentive compensation, and benefits.  Cash compensation and benefits decreased by $231 to $12,775 for the three months ended March 31, 2022 from $13,006 for the three months ended March 31, 2021.  The decrease was due to an increase a decrease in incentive compensation that is tied to revenues and operating profitability, partially offset by increases related to the continued build out of the Cohen and Company Capital Markets team.  Our total headcount increased from 98 at March 31, 2021 to 115 at March 31, 2022.     Equity-based compensation decreased by $12,537, to $1,104 for the three months ended March 31, 2022, as compared to $13,641 for the three months ended March 31, 2021.  The decrease was due to equity compensation related to Insurance SPAC II recognized upon the completion of the merger between Insurance SPAC II and MILE recorded in three months ended March 31, 2021.     Business Development, Occupancy, and Equipment   Business development, occupancy, and equipment increased by $529, or 74%, to $1,248 for the three months ended March 31, 2022 from $719 for the three months ended March 31, 2021.  This increase was comprised of an increase in business development of $250 and an increase in occupancy and equipment of $279.  Business development increased primarily due to increased travel costs.  Occupancy costs increased due to additional rent for additional space in our New York office.     Subscriptions, Clearing, and Execution     Subscriptions, clearing, and execution decreased by $849, or 30%, to $1,941 for the three months ended March 31, 2022 from $2,790 for the three months ended March 31, 2021.  The decrease was comprised of a decrease in clearing and execution costs of $1,089 partially offset by an increase in subscriptions of $240.  The decrease in clearing and execution was the result of new issue costs and GCF repo clearing costs recognized in the three months ended March 31, 2021.     Professional Fee and Other Operating Expenses   Professional fee and other operating expenses increased by $2, or 0%, to $1,996 for the three months ended March 31, 2022 from $1,994 for the three months ended March 31, 2021.    Depreciation and Amortization   Depreciation and amortization increased by $51, or 63%, to $132 for the three months ended March 31, 2022 from $81 for the three months ended March 31, 2021.    69 Table of Contents   Non-Operating Income and Expense   Interest Expense, net     Interest expense, net decreased by $663, to $1,351 for the three months ended March 31, 2022 from $2,014 for the three months ended March 31, 2021.     INTEREST EXPENSE (Dollars in Thousands)       Three Months Ended March 31,       2022     2021     Change   Junior subordinated notes   $ 657     $ 647     $ 10   2020 Senior Notes     119       133       (14 ) 2013 Convertible Notes / 2019 Senior Notes     -       71       (71 ) 2017 Convertible Note     327       375       (48 ) 2018 FT LOC/2019 FT Revolver/Byline Credit Facility     72       65       7   Redeemable Financial Instrument - DGC Trust / CBF     -       197       (197 ) Redeemable Financial Instrument - JKD Capital Partners I LTD     176       526       (350 )     $ 1,351     $ 2,014     $ (663 )   See notes 15 and 16 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.     Income / (loss) from Equity Method Affiliates     Income / (loss) from equity method affiliates decreased by $11,269 to ($12,104) for the three months ended March 31, 2022 from ($835) for the three months ended March 31, 2021.  See note 11 to our consolidated financial statements included in this Quarterly Report on Form 10-Q.        Three Months Ended March 31,       2022     2021     Change   Insurance SPACs   $ (589 )   $ (560 )   $ (29 ) Dutch Real Estate Entities     (8 )     (133 )     125   Other SPAC Sponsor Entities     (11,507 )     (142 )     (11,365 ) Total   $ (12,104 )   $ (835 )   $ (11,269 )   SPAC Sponsor Entities includes both indirect and direct investments in SPAC Sponsor Entities.  Several of these Sponsor Entities are invested in SPACs that have completed their business combinations.  Those Sponsor Entities hold restricted and unrestricted equity interests in the public post-merger entities.  We account for our investments in Sponsor Entities under the equity method of accounting.  If the Sponsor Entity distributes SPAC shares to us, we account for those SPAC shares as a component of other investments, at fair value.  The following table shows the equity method balance included in other SPAC Sponsor Entities above broken out by the ultimate public company investee.         Three Months Ended March 31,       2022     2021     Change   HLGN   $ (10,558 )   $ (1 )   $ (10,557 ) WEJO     (1,048 )     (9 )     (1,039 ) DTRS     1,309       -       1,309   ACHR     (149 )     -       (149 ) Other     (1,061 )     (132 )     (929 ) Total   $ (11,507 )   $ (142 )   $ (11,365 )     During the three months ended March 31, 2022, our share of the HLGN shares held by the Sponsor Entity were distributed to us.  Accordingly, as of March 31, 2022,  we have no equity method investment in the Sponsor Entity of HLGN.  However, we hold HLGN shares as a component of other investments, at fair value as of March 31, 2022.  See  Principal Transactions  above and note 8 to our consolidated financial statements included in this Quarterly Report on Form 10-K.   The shares of WEJO held by the Sponsor Entity are restricted. The Sponsor Entity we invest in holds shares of WEJO.  We expect this Sponsor Entity to either (a) liquidate this investment and distribute to us our allocable proceeds or (b) distribute to us our allocable shares of WEJO in-kind.  In either case, the final cash realized from this investment will be impacted by the performance of this investment until it is liquidated.  The remaining equity method balance in the Sponsor Entity of WEJO was $1,505 as of March 31, 2022.  We also held investments in WEJO shares as component of other investments, at fair value during the three months ended March 31, 2022.  See  Principal Transactions  above and note 8 to our consolidated financial statements included in this Quarterly Report on Form 10-Q.    Alpha Tau Medical, Ltd. (NASDAQ: DTRS) is a public company.  The Sponsor Entity in which we invest in holds restricted shares of DTRS.  We expect this Sponsor Entity to either (a) liquidate this investment and distribute to us our allocable proceeds or (b) distribute to us our allocable shares of DTRS in-kind.  In either case, the final cash realized from this investment will be impacted by the performance of this investment until it is liquidated.  As of March 31, 2022, our equity method investment in the Sponsor Entity which holds DTRS shares was $1,309.     Archer Aviation (NYSE: ACHR) is a public company.  The Sponsor Entity we invest in holds restricted shares of A CHR.  W e expect this Sponsor Entity to either (a) liquidate this investment and distribute to us our allocable proceeds or (b) distribute to us our allocable shares of ACHR in-kind.  In either case, the final cash realized from this investment will be impacted by the performance of this investment until it is liquidated.  As of March 31, 2022, our equity method investment in the Sponsor Entity which holds ACHR shares was $579.     70 Table of Contents   Income Tax Expense / (Benefit)     The income tax expense / (benefit) increased by $965 to income tax expense / (benefit) of $1,833 for the three months ended March 31, 2022 from $868 for the three months ended March 31, 2021. The increase was primarily due to an increase in the valuation allowance related to our NOL carryforward assets recorded in the three months ended March 31, 2022.  This increase of the valuation allowance was recorded as the result the conversion of the 2017 convertible notes which occurred in March.  This conversion resulted in a dilution of the parent company's share of the operating LLC which reduced the expected amount of future income available to utilize these carryforward assets.     Our provision for income taxes fluctuates due to several factors mostly attributable to our legal structure summarized as follows:   It is important to note that when evaluating our income tax expense or benefit (especially compared to other companies' expense or benefit) that substantially all of our operations occur in the Operating LLC.  There are some local taxes and foreign taxes to which the Operating LLC or its subsidiaries are subject to, but the Operating LLC is generally treated as a pass-through entity and is not subject to U.S. federal or state income tax.  Therefore, the members of the Operating LLC receive allocations of its income and are subject to U.S. federal and state taxes.  For the current period, Cohen and Company, Inc. owned 31.43% of the economic interests of the Operating LLC (on average) and is allocated the same percentage of income generated by the Operating LLC.  To the extent Cohen and Company, Inc. incurs tax obligations on this, the related tax expense is recognized in these consolidated financial statements.  However, the remaining 68.57% that is allocated to the non-controlling members of the Operating LLC is subject to taxation on the members' tax returns.  That tax obligation is not included in these consolidated financial statements.     We also have significant valuation allowances applied against our carryforward (NOL and NCL) deferred tax assets as well as our tax over book basis in the Operating LLC.  Valuation allowances are applied to deferred tax assets when management determines that the assets may not be fully realized.  This determination requires significant judgement and is primarily based on management's expectations regarding the generation of future taxable income.  ASC 740 indicates that all available evidence should be considered when assessing the need for and the appropriate level of a valuation allowance.  All available evidence includes historical information supplemented by all currently available information about future years.  Our earnings are very volatile which makes this determination especially difficult.  Although we will make adjustments to these valuations allowances throughout the year as appropriate, our actual results for any particular fiscal year provide the best evidence of our ability to generate future taxable income.  We give more weight to the full year results in making our estimates of future taxable income as compared to quarterly earnings which are even more volatile than our annual results.  Therefore, we may have significant adjustments to our valuation allowances (and therefore our income tax expenses or benefit) which may be recorded in the fourth quarter of any particular fiscal year.     71 Table of Contents   Net Income / (Loss) Attributable to the Non-Convertible Non-controlling Interest   Net income / (loss) attributable to the non-controlling interest for the three months ended March 31, 2022 and 2021 was comprised of the non-controlling interest related to member interests in consolidated subsidiaries of the Operating LLC other than interests held by us for the relevant periods.  These interests are not convertible into Common Stock.     SUMMARY CALCULATION OF NON-CONVERTIBLE NON-CONTROLLING INTEREST For the Three Months Ended March 31, 2022       Three Months Ended March 31,       2022     2021     Change   Insurance SPAC Sponsor Entities   $ -     $ 3,559     $ 3,559   Insurance II SPAC Sponsor Entities     -       26,646       26,646   Insurance III SPAC Sponsor Entities     (297 )     (229 )     68   SPAC Pipe Entities     (2,082 )     -       2,082   Other SPAC Sponsor Investor     (12,325 )     (1 )     12,324   Other     -       (5 )     (5 ) Total   $ (14,704 )   $ 29,970     $ 44,674       Insurance SPAC Sponsor Entities, Insurance SPAC II Sponsor Entities, and Insurance SPAC III Sponsor Entities are the Sponsor Entities formed by us for these SPACs.  SPAC Pipe Entities are entities which themselves invest in Pipe's (Private Investment in Public Equity) of post business combination SPACs.  Other SPAC Sponsor Investor represents an entity which we consolidate but do not wholly own that invests in other SPAC Sponsor Entities.     Net Income / (Loss) Attributable to the Convertible Non-controlling Interest   Net income / (loss) attributable to the non-controlling interest for the three months ended March 31, 2022 and 2021 was comprised of the non-controlling interest related to member interests in the Operating LLC other than interests held by us for the relevant periods. These interests are convertible into Common Stock.  See note 21 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021.     SUMMARY CALCULATION OF CONVERTIBLE NON-CONTROLLING INTEREST For the Three Months Ended March 31, 2022       Total Operating LLC     Cohen &               Consolidated     Company Inc.     Consolidated   Net income / (loss) before tax   $ (33,333 )   $ -     $ (33,333 ) Income tax expense / (benefit)     111       1,722       1,833   Net income / (loss) after tax     (33,444 )     (1,722 )     (35,166 ) Other consolidated subsidiary non-controlling interest     (14,704 )                 Net income / (loss) attributable to the Operating LLC     (18,740 )                 Average effective Operating LLC non-controlling interest % (1)     68.57 %                 Operating LLC non-controlling interest     (12,850 )                    SUMMARY CALCULATION OF NON-CONTROLLING INTEREST For the Three Months Ended March 31, 2021       Total Operating LLC     Cohen &               Consolidated     Company Inc.     Consolidated   Net income / (loss) before tax   $ 67,596     $ -     $ 67,596   Income tax expense / (benefit)     237       631       868   Net income / (loss) after tax     67,359       (631 )     66,728   Other consolidated subsidiary non-controlling interest     29,970                   Net income / (loss) attributable to the Operating LLC     37,389                   Average effective Operating LLC non-controlling interest % (1)     73.29 %                 Operating LLC non-controlling interest     27,403                         (1) Because earnings are recognized unevenly throughout the year and the non-controlling interest percentage may change during the period, the average effective non-controlling interest percentage may not equal the percentage at the end of any period or the simple average of the beginning and ending percentages.  72 Table of Contents   Liquidity and Capital Resources   Liquidity is a measurement of our ability to meet potential cash requirements including ongoing commitments to repay debt borrowings, make interest payments on outstanding borrowings, fund investments, and support other general business purposes. In addition, our United States and French broker-dealer subsidiaries are subject to certain regulatory requirements to maintain minimum levels of net capital. Historically, our primary sources of funds have been our operating activities and general corporate borrowings. In addition, our trading operations have generally been financed by use of collateralized securities financing arrangements as well as margin loans.   Certain subsidiaries of the Operating LLC have restrictions on the withdrawal of capital and otherwise in making distributions and loans. JVB is subject to net capital restrictions imposed by the SEC and FINRA that require certain minimum levels of net capital to remain in this subsidiary. In addition, these restrictions could potentially impose notice requirements or limit our ability to withdraw capital above the required minimum amounts (excess capital) whether through a distribution or a loan. CCFESA is subject to the regulations of the ACPR.  ACPR imposes minimum capital requirements.  See note 25 to our consolidated financial statements included in our Annual Report  for the year ended December 31, 2021 on Form 10-K.   See Liquidity and Capital Resources – Contractual Obligations below.   During the third quarter of 2010, our board of directors initiated a dividend of $0.50 per quarter, which was paid regularly through December 31, 2011. Beginning in 2012, our board of directors declared a dividend of $0.20 per quarter, which was paid regularly through the first quarter of 2019.  Each time a cash dividend was declared by our board of directors, a pro rata distribution was made to the other members of the Operating LLC upon payment of dividends to our stockholders.    On July 29, 2021, our board of directors reinstated our quarterly dividend declaring a cash dividend of $0.25 per share.  We have paid a quarterly cash dividend of $0.25 regularly since that date.  In addition to our routine quarterly distribution, on March 8, 2022, our board of directors declared a special cash dividend of $0.75 per share.  On May 5, 2022, our board of directors declared a quarterly dividend of $0.25 per share payable on June 3, 2022 to shareholders of record on May 20, 2022.   During the three months ended March 31, 2021, we repurchased 38,647 shares of Common Stock in the open market pursuant to the December 2020 Letter Agreement for a total purchase price of $662.  During the three months ended March 31, 2022, no shares were repurchased.  All of the repurchases were completed using cash on hand. The December 2020 Letter Agreement expired on December 31, 2021.     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 Company's Common Stock, having an aggregate offering price of up to $75,000 (collectively the “Shares”). Sales of the Shares, if any, under the Equity Agreement will be made in sales deemed to be “at-the-market offerings” as defined in Rule 415 under the Securities Act as agreed with the Sales Agent.    On June 7, 2021, the Company entered into a letter agreement (the “Equity Distribution Letter Agreement”) with the Sales Agent, pursuant to which the Sales Agent agreed to use its best efforts to, commencing on June 5, 2021, sell on the Company’s behalf up to $7,966 of the Shares in the open market pursuant to the terms and conditions of the Equity Distribution Agreement and the Equity Distribution Letter Agreement, and the Company agreed not to take any action that would cause the sales of the Shares under the Letter Agreement not to comply with Rule 10b5-1 or Regulation M under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Equity Distribution Letter Agreement was entered into in connection with the ATM Program and is designed to comply with Rule 10b5-1 under the Exchange Act.   No shares were sold under the ATM Program during the three months ended March 31, 2021 or 2022.     During the three months ended March 31, 2022 and 2021, we had the following other significant financing transactions.  This excludes non-cash transactions.  See note 22  to our consolidated financial statements included in this Quarterly Report on Form 10-Q.     During the three months ended March 31, 2022:     ●  We issued a new 2020 Senior Note for $2,250 and used the proceeds to pay off an existing 2020 Senior Note.     ●  We made distributions to the non-convertible non-controlling interest of $1,775.     During the three months ended March 31, 2021:      ● We repaid $4,000 of redeemable financial instruments.     73 Table of Contents   Cash Flows   We have seven primary uses for capital:   (1) To fund the operations of our Capital Markets business segment . Our Capital Markets business segment utilizes capital (i) to fund securities inventory to facilitate client trading activities; (ii) for risk trading on the firm’s own account; (iii) to fund our collateralized securities lending activities; (iv) for temporary capital needs associated with underwriting activities; (v) to fund business expansion into existing or new product lines including additional capital dedicated to our mortgage group as well as our matched book repo business; and (vi) to fund any operating losses incurred. (2) To fund the expansion of our Asset Management business segment .  We generally grow our assets under management by sponsoring new Investment Vehicles.  The creation of a new Investment Vehicle often requires us to invest a certain amount of our own capital to attract outside capital to manage.  Also, these new Investment Vehicles often require warehouse and other third party financing to fund the acquisition of investments.  Finally, we generally will hire employees to manage new Investment Vehicles and will operate at a loss for a startup period.   (3) To fund investments . We make principal investments (including sponsor and other investments in SPACs) to generate returns.  We may need to raise additional debt or equity financing in order to ensure we have the capital necessary to take advantage of attractive investment opportunities.   (4) To fund mergers or acquisitions . We may opportunistically use capital to acquire other asset managers, individual asset management contracts, or financial services firms. To the extent our liquidity sources are insufficient to fund our future merger or acquisition activities, we may need to raise additional funding through an equity or debt offering. No assurances can be given that additional financing will be available in the future, or that if available, such financing will be on favorable terms. (5) To fund potential dividends and distributions . We sometimes pay quarterly and special dividends.  When we pay a dividend, a pro rata distribution is paid to the other members of the Operating LLC upon the payment of any dividends to stockholders of Cohen & Company Inc.   (6) To fund potential repurchases of Common Stock.   The Company has opportunistically repurchased Common Stock in private transactions as well as through its 10b5-1 Plan.  See note 17 to our consolidated financial statements included in this Quarterly Report on Form 10-Q. (7) To pay off debt as it matures:   The Company has indebtedness that must be repaid as it matures. See note 16 to our consolidated financial statements included in this Quarterly Report on Form 10-Q.    If we are unable to raise sufficient capital on economically favorable terms, we may need to reduce the amount of capital invested for the uses described above, which may adversely impact earnings and our ability to pay future dividends, if any.   As of March 31, 2022 and December 31, 2021, we maintained cash and cash equivalents of $ 62,510 and $ 50,567, respectively. We generated cash from or used cash for the following activities.      SUMMARY CASH FLOW INFORMATION (Dollars in Thousands)   .     Three Months Ended March 31,         2022     2021   Cash flow from operating activities     $ 14,350     $ (28,150 ) Cash flow from investing activities       (149 )     10,959   Cash flow from financing activities       (2,182 )     (5,145 ) Effect of exchange rate on cash       (76 )     (189 ) Net cash flow       11,943       (22,525 ) Cash and cash equivalents, beginning       50,567       41,996   Cash and cash equivalents, ending     $ 62,510     $ 19,471     See the statement of cash flows in our consolidated financial statements. We believe our available cash and cash equivalents, as well as our investment in our trading portfolio and related borrowing capacity, will provide sufficient liquidity to meet the cash needs of our ongoing operations in the near term.   74 Table of Contents   Three Months Ended March 31, 2022   As of March 31, 2022, our cash and cash equivalents were $ 62,510, representing an increase of $ 11,943 from December 31, 2021. The increase was attributable to cash provided by operating activities of $ 14,350, cash used in investing activities of $ 149, cash used in financing activities of $ 2,182, and a decrease in cash caused by the change in exchange rates of $ 76.   The cash provided by operating activities of $ 14,350 was comprised of (a) net cash inflows of $ 12,154 related to working capital fluctuations; (b) net cash inflows of $ 3,814 from trading activities comprised of our investments-trading, trading securities sold, not yet purchased, receivables under resale agreements, securities sold under agreements to repurchase, and receivables and payables from brokers, dealers, and clearing agencies, as well as the changes in unrealized gains and losses on the investments-trading and trading securities sold, but not yet purchased; and (c)  net cash outflows from other earnings items of $ 1,618 (which represents net income or loss adjusted for the following non-cash operating items: other income / (expense), realized and unrealized gains and losses and accretion of income on other investments, income from equity method affiliates, equity based compensation, depreciation and amortization, deferred taxes, and amortization of discount on debt).      The cash used in investing activities of $ 149 was comprised of (a) $3,869 of purchases of other investments, at fair value; (b) $4,178 of purchases of other investments sold, not yet purchased, at fair value; (c) $438 of investments in equity method affiliates, (d) $298 of purchases of furniture, equipment, and leasehold improvements; partially offset by (e) $7,395 of sales and returns of principal of other investments, at fair value and (f) $1,239 of sales and returns of principal of other investments sold, not yet purchased, at fair value.     The cash used in financing activities of $ 2,182 was comprised of (a) $2,250 used to repay debt, (b) $219 used to net settle equity awards, (c) $54 used to pay dividends, (d) $142 used to pay distributions to the convertible non-controlling interest; and (e) $1,775 of distributions to the non-convertible non-controlling interest; partially offset by (f) $2,250 in proceeds from issuance of debt and (g) $6 in non-convertible non-controlling interest investments.     Three Months Ended March 31, 2021   As of March 31, 2021, our cash and cash equivalents were $ 19,471, representing an decrease of $ 22,525 from December 31, 2020. The decrease was attributable to cash used in operating activities of $ 28,150, cash provided by investing activities of $ 10,959, cash used in financing activities of $ 5,145, and the decrease in cash caused by the change in exchange rates of $ 189.   The cash used in operating activities of $ 28,150 was comprised of (a) net cash outflows of $ 17,309 related to working capital fluctuations; (b) net cash outflows of $ 10,700 from trading activities comprised of our investments-trading, trading securities sold, not yet purchased, receivables under resale agreements, securities sold under agreements to repurchase, and receivables and payables from brokers, dealers, and clearing agencies, as well as the changes in unrealized gains and losses on the investments-trading and trading securities sold, but not yet purchased; and (c)  net cash outflows from other earnings items of $ 141 (which represents net income or loss adjusted for the following non-cash operating items: other income / (expense), realized and unrealized gains and losses and accretion of income on other investments, income from equity method affiliates, equity based compensation, depreciation and amortization, deferred taxes, and amortization of discount on debt).   The cash provided by investing activities of $ 10,959 was comprised of (a) $46,740 of sales and returns of principal of other investments, at fair value; (b) $4,398 of sales and returns of principal on other investments sold, not yet purchased; partially offset by (c) $35,279 of purchases of other investments, at fair value; (d) $4,442 of purchase of other investments sold, not yet purchased, at fair value; (e) $268 of investments in equity method affiliates; and (f) $190 of purchases of furniture, equipment, and leasehold improvements.   The cash used in financing activities of $ 5,145 was comprised of (a) $4,000 of repayments of redeemable financial instruments; (b) $361 in cash used to net settle equity awards; (c) $662 of purchases and retirements of Common Stock; (d) $138 of non-controlling interest distributions; (e) $7 of dividends paid on vested Common Stock; partially offset by $23 in proceeds from non-controlling interest contributions.     75 Table of Contents   Note Regarding Collateral Deposits and Impact on Operating Cash Flow   As part of our matched book repo operations, we enter into reverse repos with counterparties whereby we lend money and receive securities as collateral.  In accordance with ASC 860, the collateral securities are not recorded in our consolidated balance sheets.  However, from time to time we will hold cash instead of securities as collateral for these transactions.  When we are provided cash as collateral for reverse repo transactions, we will make an entry to increase our cash and cash equivalents and to increase our other liabilities for the amount of cash received.  There are two main reasons we may receive collateral in the form of cash as opposed to securities.  First, when the value of the collateral securities we have in our possession decline, we will require the counterparty to provide us with additional collateral.  We will accept either cash or additional liquid securities.  Often, our counterparties will provide us with cash as they may not have liquid securities readily available.  Second, from time to time, our counterparties require a portion of the collateral securities in our possession returned to them for operating purposes.  In such instances, the counterparty may not have substitute liquid securities available and will often provide us with cash as collateral instead.  It is important to note that when we receive cash as collateral, it is temporary in nature and we have an obligation to return that cash when the counterparty provides substitute liquid securities as collateral or otherwise satisfies their associated reverse repo obligation.  We are generally required to return any cash collateral the same business day that we receive substitute securities.  The amount of cash we receive as collateral for our repo operations is volatile and therefore, both our cash and cash equivalents balance and our cash provided by and used in operations are volatile as they are both impacted. These amounts can be large and should be taken into account when analyzing our cash flow from operations.     The following table shows the impact of changes in these collateral deposits had on our cash flows in each period presented:       Three Months Ended March 31,       2022     2021   Collateral deposit end of period   $ 40,465     $ 29,275   Less: Collateral deposit beginning of period     17,320       41,119   Impact to cash flow from operations   $ 23,145     $ (11,844 )   Regulatory Capital Requirements   We have two subsidiaries that are licensed securities dealers: JVB in the United States and CCFESA in France. As a U.S. broker-dealer, JVB is subject to the Uniform Net Capital Rule in Rule 15c3-1 under the Exchange Act. Our French-based subsidiary, CCFESA, is subject to the regulatory supervision and requirements of the ACPR.  The amount of net assets that these subsidiaries may distribute is subject to restrictions under these applicable net capital rules. These subsidiaries have historically operated in excess of minimum net capital requirements. Our minimum capital requirements at March 31, 2022 were as follows.        MINIMUM NET CAPITAL REQUIREMENTS (Dollars in Thousands)   United States   $ 250   Europe     534   Total   $ 784     We operate with more than the minimum regulatory capital requirement in our licensed broker-dealers and at March 31, 2022, total net capital, or the equivalent as defined by the relevant statutory regulations, in our licensed broker-dealers totaled $57,945. See note 18 to our consolidated financial statements included in Item 1 in this Quarterly Report on Form 10-Q.  In addition, our licensed broker-dealers are generally subject to capital withdrawal notification and restrictions.   Restrictions of Distributions of Capital from JVB   As of March 31, 2022, our total equity on a consolidated basis was $121,478.  However, the total equity of JVB was $96,970.  Of the $24,508 in equity outside of JVB, $11,506 represents non-convertible non-controlling interests comprised mainly of the non-controlling interests of Insurance SPAC III Sponsor Entities and other consolidated subsidiaries which cannot be utilized by the Operating LLC for other purposes.   From time to time, we may need to take distributions of income (and potentially returns of capital) from JVB to satisfy the cash needs as a result of the losses incurred outside of JVB or to satisfy other obligations that come due outside of JVB.  However, we are subject to significant limitations on our ability to make distributions from JVB.  These limitations include limitations imposed by FINRA under rule 15c3-1 (described immediately above) and limitations under our line of credit with Byline Bank (see note 16 to our consolidated financial statements included in this Quarterly Report on Form 10-Q).  Furthermore, counterparties to JVB have their own internal counterparty credit requirements.  The specific requirements are not generally shared with us.  However, if we take too much in capital distributions from JVB (beyond its net income), we may not be able to trade with certain counterparties which may cause JVB’s operations to deteriorate.    Securities Financing   We maintain repurchase agreements with various third-party institutional investors. There is no maximum limit as to the amount of securities that may be transferred pursuant to these agreements, and transactions are approved on a case-by-case basis. The repurchase agreements do not include substantive provisions other than those covenants and other customary provisions contained in standard master repurchase agreements. The repurchase agreements generally require us to transfer additional securities to the counterparty in the event the value of the securities then held by the counterparty in the margin account falls below specified levels and contain events of default in cases where we breach our obligations under the agreement. We receive margin calls from our repurchase agreement counterparties from time to time in the ordinary course of business. To date, we have maintained sufficient liquidity to meet margin calls, and we have always been able to satisfy a margin call, however, no assurance can be given that we will be able to satisfy requests from our counterparties to post additional collateral in the future. See note 10 to our consolidated financial statements included in Item 1 in this Quarterly Report on Form 10-Q.   If there were an event of default under the repurchase agreements, we would give our counterparty the option to terminate all repurchase transactions existing with us and make any amount due from us to the counterparty payable immediately. Repurchase obligations are full recourse obligations to us. If we were to default under a repurchase obligation, the counterparty would have recourse to our other assets if the collateral was not sufficient to satisfy the obligation in full. Most of our repurchase agreements are entered into as part of our matched book repo business.   76 Table of Contents   Our clearing agencies provide securities financing arrangements including margin arrangements and securities borrowing and lending arrangements. These arrangements generally require us to transfer additional securities or cash to the clearing agency in the event the value of the securities then held by the clearing agency in the margin account falls below specified levels and contain events of default in cases where we breach our obligations under such agreements.  An event of default under the clearing agreement would give our counterparty the option to terminate our clearing arrangement. Any amounts owed to the clearing agency would be immediately due and payable. These obligations are recourse to us. Furthermore, a termination of our clearing arrangements would result in a significant disruption to our business and would have a significant negative impact on our dealings and relationship with our customers.  The following table presents our period end balance, average monthly balance, and maximum balance at any month end during the three months ended March 31, 2022 and the twelve months ended December 31, 2021 for receivables under resale agreements and securities sold under agreements to repurchase.       For the Three Months Ended March 31, 2022     For the Twelve Months Ended December 31, 2021   Receivables under resale agreements                 Period end     2,193,562       3,175,645   Monthly average     2,716,251       5,750,146   Maximum month end     3,006,658       7,299,538   Securities sold under agreements to repurchase                 Period end     2,188,415       3,171,415   Monthly average     2,711,530       5,745,838   Maximum month end     3,002,514       7,289,275     Fluctuations in the balance of our repurchase agreements from period to period and intra-period are dependent on business activity in those periods. The fluctuations in the balances of our receivables under resale agreements over the periods presented were impacted by our clients’ desires to execute collateralized financing arrangements through the repurchase market or other financing products.  Average balances and period end balances will fluctuate based on market and liquidity conditions and we consider such intra-period fluctuations as typical for the repurchase market. Month-end balances may be higher or lower than average period balances.  See note 4 and 10 regarding wind down of GCF repo business.     77 Table of Contents   Debt Financing   See note 16 to our consolidated financial statements included in Item 1 in this Quarterly Report on Form 10-Q for a discussion of the Company’s outstanding debt.      DETAIL OF DEBT (Dollars in Thousands)       As of     As of   Interest         Description   March 31, 2022     December 31, 2021   Rate Terms   Interest (3)   Maturity Non-convertible debt:                           10.00% senior note (the "2020 Senior Notes")   $ 4,500     $ 4,500   Fixed   10.00%   January 2024 Contingent convertible debt:                           8.00% convertible senior note (the "2017 Convertible Note")     -       15,000   Fixed   8.00%   March 2023 (1) Less unamortized debt issuance costs     -       (67 )                 -       14,933             Junior subordinated notes (2):                           Alesco Capital Trust I     28,125       28,125   Variable   4.30%   July 2037 Sunset Financial Statutory Trust I     20,000       20,000   Variable   5.15%   March 2035 Less unamortized discount     (24,027 )     (24,164 )                 24,098       23,961                                         ByLine Bank     -       -   Variable   NA   December 2023 Total   $ 28,598     $ 43,394               (1) 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 in 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 20 to the Annual Report on Form 10-K for the year ended December 31, 2021.  Effective March 20, 2022, the 2017 Note was converted into 10,344,827 units. (2) 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 March 31, 2022 on a combined basis was 11.91% assuming the variable rate in effect on the last day of the reporting period remains in effect until maturity. (3) Represents the interest rate in effect as of the last day of the reporting period.     78 Table of Contents   Redeemable Financial Instruments      As of March 31, 2022 and December 31, 2021, we had a redeemable financial instrument payable to JKD Capital Partners I LTD.  See note 16 to our consolidated financial statements included in this Quarterly Report on Form 10-Q.      Off-Balance Sheet Arrangements   Other than as described in note 9 (derivative financial instruments) and note 14 (variable interest entities) to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q, there were no material off balance sheet arrangements as of March 31, 2022.   Contractual Obligations   The table below summarizes our significant contractual obligations as of March 31, 2022 and the future periods in which such obligations are expected to be settled in cash. We assumed that the 2017 Convertible Note is not converted prior to maturity.  Our junior subordinated notes are assumed to be repaid on their respective maturity dates. Excluded from the table below are obligations that are short-term in nature, including trading liabilities (including derivatives) and repurchase agreements.     CONTRACTUAL OBLIGATIONS March 31, 2022 (Dollars in Thousands)         Payment Due by Period       Total     Less than 1 Year     1-3 Years     3-5 Years     More than 5 Years   Operating lease arrangements     13,738       2,343       4,813       3,184       3,398   Maturity of 2020 Senior Notes (1)     4,500       4,500       -       -       -   Interest on 2020 Senior Notes (1)     923       435       488       -       -   Maturities on junior subordinated notes     48,125       -       -       -       48,125   Interest on junior subordinated notes (2)     32,122       2,238       4,477       4,477       20,930   Redeemable Financial Instrument - JKD Capital Partners 1 (3)     7,957       7,957       -       -       -   Other Operating Obligations (4)     2,481       1,579       902       -       -       $ 109,846     $ 19,052     $ 10,680     $ 7,661     $ 72,453       (1) The 2020 Notes mature on January 31, 2024.  However, any time after January 31, 2023, the holder can give us 31 days' notice and require full repayment.  For purposes of the table above, we show the maturity on earlier date, but show the interest payments out to the stated maturity date.     (2) The interest on the junior subordinated notes related to Alesco Capital Trust I is variable. The interest rate of 4.3% (based on a 90-day LIBOR rate in effect as of March 31, 2022 plus 4.00%) was used to compute the contractual interest payment in each period noted. The interest on the junior subordinated notes related to Sunset Financial Statutory Trust I is variable. The interest rate of 5.15% (based on a 90-day LIBOR rate in effect as of March 31, 2022 plus 4.15%) was used to compute the contractual interest payment in each period noted.   (3) Represents redemption value of the redeemable financial instruments as of the reporting period. The redeemable financial instruments do not have a fixed maturity date.  The period shown above represents the first period the holder of these instruments has the ability to require redemption by us.     (4) Represents material operating contracts for various services.     79 Table of Contents   We believe that we will be able to continue to fund our current operations and meet our contractual obligations through a combination of existing cash resources and other sources of credit. Due to the uncertainties that exist in the economy, we cannot be certain that we will be able to replace existing financing or find sources of additional financing in the future.   Recent Accounting Pronouncements   The following is a list of recent accounting pronouncements that we believe will have a continuing impact on our financial statements going forward.   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.  We are currently evaluating the new guidance to determine the impact it may have on our consolidated financial state