Cohen & Co Inc. 10-Q

cohn20230630_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 June 30, 2023   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)   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  August 1, 2023, there were 1,821,347   shares of common stock ($0.01 par value per share) of Cohen & Company Inc. ("Common Stock") outstanding.   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     Table of Contents       Cohen & Company Inc.   FORM 10-Q INDEX TO QUARTERLY REPORT ON FORM 10-Q June 30, 2023             Page   PART I. FINANCIAL INFORMATION        Item 1. Financial Statements (Unaudited) 5        Consolidated Balance Sheets—June 30, 2023 and December 31, 2022 5        Consolidated Statements of Operations and Comprehensive Income (Loss)—Three and Six Months Ended June 30, 2023 and 2022 6        Consolidated Statements of Changes in Equity—Three and Six Months Ended June 30, 2023 and 2022 7        Consolidated Statements of Cash Flows—Six Months Ended June 30, 2023 and 2022 9        Notes to Consolidated Financial Statements (Unaudited) 10      Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 59      Item 3. Quantitative and Qualitative Disclosures about Market Risk 94      Item 4. Controls and Procedures 95    Part II. OTHER INFORMATION        Item 1. Legal Proceedings 96      Item 1A. Risk Factors 96      Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 97      Item 3. Defaults Upon Senior Securities 97       Item 4. Mine Safety Disclosures 97       Item 5. Other Information 97       Item 6. Exhibits 98    Signatures 99   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;   ● 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, 2022. 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;   ● losses and reduced transaction volumes as a result of increasing interest rates and inflation;   ● risks and liabilities due to our investments in the equity interests of SPACs and SPAC sponsor entities including the risk of increased regulation applicable 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 any public conference calls which we may conduct (including the scheduled dates, times and the methods by which investors and others can listen to any of 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) S.A., a majority owned subsidiary regulated by the Autorite de Controle Prudentiel et de Resolution ("ACPR") in France; and “ CCFEL ” refers to Cohen & Company Financial (Europe) Limited, a wholly owned subsidiary of the Operating LLC formerly regulated by the Central Bank of Ireland (the “CBI”).     “ Securities Act ” refers to the Securities Act of 1933, as amended; and “ Exchange Act ” refers to the Securities Exchange Act of 1934, as amended.   4 Table of Contents       PART I. FINANCIAL INFORMATION     ITEM 1. FINANCIAL STATEMENTS.   COHEN & COMPANY INC.   CONSOLIDATED BALANCE SHEETS   (Dollars in Thousands)        June 30, 2023               (unaudited)     December 31, 2022   Assets                 Cash and cash equivalents   $ 12,166     $ 29,101   Receivables from brokers, dealers, and clearing agencies     108,020       140,933   Due from related parties     719       787   Other receivables     5,734       9,527   Investments-trading     192,805       211,828   Other investments, at fair value     56,868       28,022   Receivables under resale agreements     457,528       437,692   Investments in equity method affiliates     8,782       8,929   Deferred income taxes     331       6,934   Goodwill     109       109   Right-of-use asset - operating leases     8,612       9,647   Other assets     4,452       3,546   Total assets   $ 856,126     $ 887,055                     Liabilities                 Payables to brokers, dealers, and clearing agencies   $ 127,627     $ 134,985   Accounts payable and other liabilities     8,513       11,439   Accrued compensation     8,044       12,434   Lease liability - operating leases     9,365       10,447   Trading securities sold, not yet purchased     98,117       133,957   Other investments sold, not yet purchased, at fair value     28,606       78   Securities sold under agreements to repurchase     457,351       452,797   Redeemable financial instruments     7,868       7,868   Debt     29,324       29,024   Total liabilities     774,815       793,029                     Commitments and contingencies (See note 21)                                       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     27       27   Common Stock, $ 0.01 par value per share, 100,000,000 shares authorized, 1,821,347 and 1,774,342 shares issued and outstanding, respectively, including 299,491 and 341,059 unvested or restricted share awards, respectively     18       17   Additional paid-in capital     73,967       72,801   Accumulated other comprehensive loss     ( 955 )     ( 955 ) Accumulated deficit     ( 35,373 )     ( 25,151 ) Total stockholders' equity     37,684       46,739   Non-controlling interest     43,627       47,287   Total equity     81,311       94,026   Total liabilities and equity   $ 856,126     $ 887,055   (     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 June 30,     Six Months Ended June 30,       2023     2022     2023     2022   Revenues                                 Net trading   $ 7,416     $ 10,377     $ 15,626     $ 22,399   Asset management     1,605       1,898       3,630       3,787   New issue and advisory     1,395       3,481       2,295       7,251   Principal transactions and other income (loss)     12,156       ( 6,602 )     9,845       ( 24,965 ) Total revenues     22,572       9,154       31,396       8,472                                     Operating expenses                                 Compensation and benefits     10,001       12,214       20,538       26,093   Business development, occupancy, equipment     1,318       1,295       2,619       2,543   Subscriptions, clearing, and execution     2,343       1,972       4,468       3,913   Professional fee and other operating     1,762       1,692       3,962       3,688   Depreciation and amortization     149       143       293       275   Total operating expenses     15,573       17,316       31,880       36,512                                     Operating income (loss)     6,999       ( 8,162 )     ( 484 )     ( 28,040 )                                   Non-operating income (expense)                                 Interest expense, net     ( 1,630 )     ( 1,106 )     ( 3,222 )     ( 2,457 ) Income (loss) from equity method affiliates     ( 511 )     ( 3,044 )     ( 906 )     ( 15,148 ) Income (loss) before income tax expense (benefit)     4,858       ( 12,312 )     ( 4,612 )     ( 45,645 ) Income tax expense (benefit)     5,550       ( 60 )     6,134       1,773   Net income (loss)     ( 692 )     ( 12,252 )     ( 10,746 )     ( 47,418 ) Less: Net income (loss) attributable to the non-convertible non-controlling interest of the Operating LLC     6,503       ( 4,167 )     6,600       ( 18,871 ) Enterprise net income (loss)     ( 7,195 )     ( 8,085 )     ( 17,346 )     ( 28,547 ) Less: Net income (loss) attributable to the convertible non-controlling interest of Cohen & Company Inc.     ( 594 )     ( 6,228 )     ( 8,108 )     ( 19,078 ) Net income (loss) attributable to Cohen & Company Inc.   $ ( 6,601 )   $ ( 1,857 )   $ ( 9,238 )   $ ( 9,469 ) Income (loss) per share data (see note 20)                                 Income (loss) per common share-basic:                                 Basic income (loss) per common share   $ ( 4.34 )   $ ( 1.30 )   $ ( 6.14 )   $ ( 6.71 ) Weighted average shares outstanding-basic     1,520,122       1,428,237       1,504,819       1,411,596   Income (loss) per common share-diluted:                                 Diluted income (loss) per common share   $ ( 4.34 )   $ ( 1.53 )   $ ( 6.14 )   $ ( 6.71 ) Weighted average shares outstanding-diluted     1,520,122       5,393,642       1,504,819       1,411,596                                     Comprehensive income (loss)                                 Net income (loss)   $ ( 692 )   $ ( 12,252 )   $ ( 10,746 )   $ ( 47,418 ) Other comprehensive income (loss) item:                                 Foreign currency translation adjustments, net of tax of $ 0     10       ( 199 )     55       ( 265 ) Other comprehensive income (loss), net of tax of $ 0     10       ( 199 )     55       ( 265 ) Comprehensive income (loss)     ( 682 )     ( 12,451 )     ( 10,691 )     ( 47,683 ) Less: comprehensive income (loss) attributable to the non-controlling interest     5,916       ( 10,541 )     ( 1,466 )     ( 38,142 ) Comprehensive income (loss) attributable to Cohen & Company Inc.   $ ( 6,598 )   $ ( 1,910 )   $ ( 9,225 )   $ ( 9,541 )   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.                       Six Months Ended June 30, 2023                       Preferred Stock     Common Stock     Additional Paid-In Capital     Retained Earnings (Accumulated Deficit)     Accumulated Other Comprehensive Income (Loss)     Total Stockholders' Equity     Non-controlling Interest     Total Equity                                                                                                                                       December 31, 2022   $ 27     $ 17     $ 72,801     $ ( 25,151 )   $ ( 955 )   $ 46,739     $ 47,287     $ 94,026   Net (loss)     -       -       -       ( 2,637 )     -       ( 2,637 )     ( 7,417 )     ( 10,054 ) Other comprehensive income     -       -       -       -       10       10       35       45   Acquisition / (surrender) of additional units of consolidated subsidiary, net     -       -       582       -       ( 12 )     570       ( 570 )     -   Equity-based compensation     -       1       299       -       -       300       789       1,089   Shares withheld for employee taxes     -       -       ( 46 )     -       -       ( 46 )     ( 118 )     ( 164 ) Dividends/distributions to convertible non-controlling interest     -       -       -       ( 594 )     -       ( 594 )     ( 1,187 )     ( 1,781 ) Redemption of convertible non-controlling interest units     -       -       -       -       -       -       ( 834 )     ( 834 ) Non-convertible non-controlling interest investment     -       -       -       -       -       -       38       38   Non-convertible non-controlling interest distributions     -       -       -       -       -       -       -       -   March 31, 2023   $ 27     $ 18     $ 73,636     $ ( 28,382 )   $ ( 957 )   $ 44,342     $ 38,023     $ 82,365   Net (loss)     -       -       -       ( 6,601 )     -       ( 6,601 )     5,909     $ ( 692 ) Other comprehensive income     -       -       -       -       3       3       7       10   Acquisition / (surrender) of additional units of consolidated subsidiary, net     -       -       30       -       ( 1 )     29       ( 29 )     -   Equity-based compensation     -       -       304       -       -       304       804       1,108   Shares withheld for employee taxes     -       -       ( 3 )     -       -       ( 3 )     ( 9 )     ( 12 ) Dividends/distributions to convertible non-controlling interest     -       -       -       ( 390 )     -       ( 390 )     ( 1,079 )     ( 1,469 ) Non-convertible non-controlling interest investment     -       -       -       -       -       -       1       1   Non-convertible non-controlling interest distributions     -       -       -       -       -       -       -       -   June 30, 2023   $ 27     $ 18     $ 73,967     $ ( 35,373 )   $ ( 955 )   $ 37,684     $ 43,627     $ 81,311     7 Table of Contents       Cohen & Company Inc.                       Six Months Ended June 30, 2022                       Preferred Stock     Common Stock     Additional Paid-In Capital     Retained Earnings (Accumulated Deficit)     Accumulated Other Comprehensive Income (Loss)     Total Stockholders' Equity     Non-controlling Interest     Total Equity                                                                                                                                       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 and vesting of shares     -       -       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   Net (loss)     -       -       -       ( 1,857 )     -       ( 1,857 )     ( 10,395 )     ( 12,252 ) Other comprehensive loss     -       -       -       -       ( 53 )     ( 53 )     ( 146 )     ( 199 ) Acquisition / (surrender) of additional units of consolidated subsidiary, net     -       -       ( 89 )     -       1       ( 88 )     88       -   Equity-based compensation and vesting of shares     -       -       287       -       -       287       795       1,082   Shares withheld for employee taxes     -               ( 4 )     -       -       ( 4 )     ( 13 )     ( 17 ) Dividends/distributions to convertible non-controlling interest     -       -       -       ( 362 )     -       ( 362 )     ( 1,060 )     ( 1,422 ) Non-convertible non-controlling interest investment     -       -       -       -       -       -       3       3   Non-convertible non-controlling interest distributions     -       -       -       -       -       -       ( 2,640 )     ( 2,640 ) June 30, 2022   $ 27     $ 17     $ 72,174     $ ( 20,516 )   $ ( 972 )   $ 50,730     $ 55,303     $ 106,033                 See accompanying notes to unaudited consolidated financial statements.   8 Table of Contents         COHEN & COMPANY INC.     Consolidated Statements of Cash Flows (Dollars in Thousands) (Unaudited)       Six Months Ended June 30,       2023     2022   Operating activities                 Net income (loss)   $ ( 10,746 )   $ ( 47,418 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:                 Equity-based compensation     2,196       2,186   Loss (gain) on other investments, at fair value     13,979       25,737   Loss (gain) on other investments, sold not yet purchased     ( 23,051 )     ( 257 ) Noncash advisory fees received     ( 492 )     -   (Income) loss from equity method affiliates     906       15,148   Depreciation and amortization     293       275   Amortization of discount on debt     300       343   Deferred tax provision (benefit)     6,603       1,362   Change in operating assets and liabilities, net:                 Change in receivables from / payables to brokers, dealers, and clearing agencies     93,621       ( 96,425 ) Change in receivables from / payables to related parties, net     68       2,747   (Increase) decrease in other receivables     3,793       ( 3,440 ) (Increase) decrease in investments-trading     19,023       21,941   (Increase) decrease in receivables under resale agreements     ( 19,836 )     1,383,320   (Increase) decrease in other assets     117       ( 40 ) Increase (decrease) in accounts payable and other liabilities     ( 86,765 )     10,970   Increase (decrease) in accrued compensation     ( 4,390 )     ( 8,899 ) Increase (decrease) in trading securities sold, not yet purchased     ( 35,840 )     79,037   Increase (decrease) in securities sold under agreements to repurchase     4,554       ( 1,380,946 ) Net cash provided by (used in) operating activities     ( 35,667 )     5,641   Investing activities                 Purchase of other investments, at fair value     ( 58,723 )     ( 4,792 ) Purchase of other investments sold, not yet purchased, at fair value     ( 112 )     ( 4,791 ) Sales and returns of principal - other investments, at fair value     57,140       11,306   Sales and returns of principal - other investments sold, not yet purchased, at fair value     25,885       1,851   Investment in equity method affiliate     ( 1,124 )     ( 620 ) Distribution from equity method affiliate     3       65   Purchase of furniture, equipment, and leasehold improvements     ( 218 )     ( 393 ) Net cash provided by (used in) investing activities     22,851       2,626   Financing activities                 Proceeds from debt     15,000       2,250   Repayment of debt     ( 15,000 )     ( 2,250 ) Cash used to net share settle equity awards     ( 175 )     ( 234 ) Cohen & Company Inc. dividends     ( 984 )     ( 1,843 ) Convertible non-controlling interest distributions     ( 2,266 )     ( 4,535 ) Redemption of convertible non-controlling interest units     ( 833 )     -   Non-convertible non-controlling interest investment     38       9   Non-convertible non-controlling interest distributions     -       ( 1,883 ) Net cash provided by (used in) financing activities     ( 4,220 )     ( 8,486 ) Effect of exchange rate on cash     101       ( 280 ) Net increase (decrease) in cash and cash equivalents     ( 16,935 )     ( 499 ) Cash and cash equivalents, beginning of period     29,101       50,567   Cash and cash equivalents, end of period   $ 12,166     $ 50,068          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 ("REIT").   As a result of the AFN Merger, AFN contributed substantially all of its assets into Cohen Brothers in exchange for newly issued units of membership interests 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 an expanding range of capital markets and asset management services. As of June 30, 2023 , th e Company had $ 2.07  billion in assets under management (“AUM”) of which $ 1.03  billion  was in collateralized debt obligations (“CDOs”). The remaining portion of AUM was 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, 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) 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 subsidiary formerly regulated by the Central Bank of Ireland (the "CBI").     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 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, and other structured financial instruments. 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 ("CCM") is the Company's full-service boutique investment bank, which focuses on M&A, capital markets, and SPAC advisory services.     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 and 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;   ●  Revenue earned 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 six months ended June 30, 2023 and 2022 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, 2022 .   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, 2022 .     11 Table of Contents     3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   A. Adoption of New Accounting Standards   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 provide 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 the London Interbank Offer Rate ("LIBOR") or another reference rate expected to be discontinued.  These ASUs are intended to help stakeholders during the global market-wide reference rate transition period and were to be in effect for a limited time through December 31, 2022. In December 2022, FASB issued ASU 2022 - 06 ( Topic 848 ) and deferred the sunset date from December 31, 2022 to December 31, 2024. The Company’s adoption of the provisions of ASU 2020 - 04 and ASU 2021 - 01, effective March 12, 2020, was on a prospective basis.  The adoption of these ASUs did not have a material impact on the Company's consolidated financial statements. See note 20.      In October  2020, the FASB issued ASU 2020 - 08, Codification Improvements to Subtopic 310 - 20, Receivables — Nonrefundable Fees and Other Costs.  This 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 ASU 2020 - 10,   Codification Improvements.   This ASU affects a wide variety of Topics in the Codification. This 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 ASU 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.    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.  The Company's adoption of the provisions of ASU 2022 - 02, effective January 1, 2023, 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.    12 Table of Contents   In June 2022, the FASB issued ASU  2022 - 03,   Fair Value Measurement (Topic 820 ): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions . The amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. This ASU is effective for fiscal years beginning after December 15, 2023.  Early adoption is permitted.  The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements.    In March 2023, the FASB issued ASU 2023 - 02,  Investments—Equity Method and Joint Ventures (Topic 323 ): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.  These amendments allow reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. The ASU responds to stakeholder feedback that the proportional amortization method provides investors and other allocators of capital with a better understanding of the returns from investments that are made primarily for the purpose of receiving income tax credits and other income tax benefits. This ASU is effective for fiscal years beginning after December 15, 2023.  Early adoption is permitted.  The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements.   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.   Receivables under resale agreements : Receivables under resale agreements are carried at their contracted resale price, have short-term maturities, and are repriced frequently or bear market interest rates and, accordingly, these contracts are at amounts that approximate fair value. The estimated fair value measurements of receivables under resale agreements are based on observations of actual market activity and are generally classified within level 2 of the valuation hierarchy.   Trading securities sold, not yet purchased : These amounts are carried at fair value. The fair value is based on quoted market prices of an active exchange, independent market quotations, market price quotations from third party pricing services, or valuation models when quotations are not available.   Other investments sold, not 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.   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 Company's debt was assumed in the AFN Merger and recorded at fair value as of that date. As of June 30, 2023  and December 31, 2022 , the fair value of the Com pany’s de bt was estimated to be  $ 35,070 and $ 34,679 , respectively. The estim ated f air 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     Consolidation of the SPAC Fund   Prior to March 31, 2023, the general partner of the SPAC Fund (“GP of the SPAC Fund”) had an investment in the SPAC Fund and the potential to earn incentive fees and did not consolidate the SPAC Fund.  Effective April 1, 2023, all of the investors in the SPAC Fund, other than the GP of the SPAC Fund, redeemed all of their interests in the SPAC Fund. Therefore, effective April 1, 2023, the GP of the SPAC Fund became the sole owner of the SPAC Fund and began consolidating it. The Company owns an interest in and consolidates the GP of the SPAC Fund. Effective April 1, 2023, the Company began consolidating the SPAC Fund as well. The Company recorded the following entry upon consolidation:         Asset/(Liability)   Cash and cash equivalents   $ 257   Receivables from brokers, dealers, and clearing agencies     68,066   Other investments, at fair value     40,388   Other assets     108   Accounts payable and other liabilities     ( 82,968 ) Other investments sold, not yet purchased     ( 25,806 ) GP's remaining investment in SPAC Fund   $ 45       Included in accounts payable and other liabilities were amounts due to the redeeming investors in the SPAC Fund. As of June 30, 2023, $ 371 of redemptions remained outstanding to be paid and were included as a component of accounts payable and other liabilities in the Company’s balance sheet.  All of the remaining redemption amounts were paid in July 2023.   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  20  to the Company's December 31, 2022  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 note 24.   The 2020  Senior Note s   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.   On January 31, 2022, the Operating LLC and JKD Investor entered into a note purchase agreement (the "2022 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 the 2020 Senior Notes held by RNCS.  See notes 16 and 24.     14 Table of Contents   INSU   Acquisition Corp   III ("Insurance SPAC III")   The Operating LLC was 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 were 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 ("IPO").  Each Insurance SPAC III Unit consisted 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 entitled 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. Pursuant to its governing documents, if Insurance SPAC III failed to consummate a business combination within the first 24 months following the IPO, its corporate existence would cease except for the purposes of winding up its affairs and liquidating its assets.   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. IAS III and its affiliates, including the Operating LLC, committed to loan Insurance SPAC III up to an additional $ 1,500  to cover operating and acquisition related expenses following the IPO, of which $ 960  was borrowed by Insurance SPAC III. See note  24.   The loans bore no interest, and if Insurance SPAC III consummated a business combination in the required timeframe, the loans were to be repaid from the funds held in Insurance SPAC III’s trust account. If Insurance SPAC III did  not consummate a business combination in the required timeframe, no funds from Insurance SPAC III's trust account could be used to repay the loans.    On November 18, 2022, Insurance SPAC III announced it would not consummate an initial business combination within the required time period and that it intended to dissolve and liquidate, effective as of the close of business on December 22, 2022, and redeem all of the Insurance SPAC III Common Stock and each Insurance SPAC III Warrant that were included in its IPO, at a per-share redemption price of approximately $ 10.09 . As of the close of business on December 22, 2022, the Insurance SPAC III Common Stock and each Insurance SPAC III Warrant were deemed cancelled and represented only the right to receive the redemption amount of $ 10.09 per share.   In order to provide for the disbursement of funds from the trust account, Insurance SPAC III instructed the trustee of the trust account to take all necessary actions to liquidate the securities held in the trust account. The proceeds of the trust account were held in a non-interest bearing account while awaiting disbursement to the holders of the public shares. Record holders received their pro rata portion of the proceeds of the trust account, less $ 100 of interest to pay dissolution expenses and net of taxes payable. Insurance SPAC III Sponsor Entities agreed to waive their redemption rights with respect to their outstanding shares of Class B common stock issued prior to the Insurance SPAC III IPO. There were  no redemption rights or liquidating distributions with respect to each Insurance SPAC III Warrant, which expired and were rendered worthless.   As a result of the liquidation of Insurance SPAC III, the Company recorded an equity method loss of $ 5,896 for the year ended December 31, 2022, which included a write-off of the amounts advanced to Insurance SPAC III from the Operating LLC as well as amounts invested. Of this loss, $ 4,808 was allocated to the non-convertible non-controlling interests. Therefore, the net impact to the Operating LLC was $ 1,088 .    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 June 30,     Six Months Ended June 30,       2023     2022     2023     2022   Net realized gains (losses) - trading inventory   $ 3,267     $ 5,112     $ 10,717     $ 9,727   Net unrealized gains (losses) - trading inventory     632       ( 2,927 )     ( 2,274 )     ( 6,190 ) Net gains and losses     3,899       2,185       8,443       3,537                                     Interest income- trading inventory     918       745       1,653       1,836   Interest income-reverse repos     6,402       12,303       12,532       28,002   Interest income     7,320       13,048       14,185       29,838                                     Interest expense-repos     ( 5,630 )     ( 7,561 )     ( 11,085 )     ( 15,223 ) Interest expense-margin payable     ( 1,416 )     ( 415 )     ( 2,866 )     ( 608 ) Interest expense     ( 7,046 )     ( 7,976 )     ( 13,951 )     ( 15,831 )                                   Other trading revenue     3,243       3,120       6,949       4,855                                     Net trading   $ 7,416     $ 10,377     $ 15,626     $ 22,399        Trading inventory includes investments classified as investments-trading as well as trading securities sold, not yet purchased.  See note 7.   For discussion of margin payable, see note 6.   Other trading revenue includes revenue earned on our agency repo business (see note 10 ).    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)       June 30, 2023     December 31, 2022   Deposits with clearing agencies   $ 250     $ 250   Unsettled regular way trades, net     5,098       -   Receivables from clearing agencies     102,672       140,683   Receivables from brokers, dealers, and clearing agencies   $ 108,020     $ 140,933     Amounts payable to brokers, dealers, and clearing agencies consisted of the following.  PAYABLES TO BROKERS, DEALERS, AND CLEARING AGENCIES (Dollars in Thousands)       June 30, 2023     December 31, 2022   Unsettled regular way trades, net   $ -     $ 3,238   Margin payable     127,627       131,747   Payables to brokers, dealers, and clearing agencies   $ 127,627     $ 134,985    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 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)       June 30, 2023     December 31, 2022   ABS   $ 1     $ 1   Corporate bonds and redeemable preferred stock     52,546       44,572   Derivatives     3,616       4,669   Equity securities     760       220   Municipal bonds     7,536       19,502   Residential mortgage loans     3,259       13,506   RMBS     8       7   U.S. government agency debt securities     20,148       19,683   U.S. government agency MBS and CMOs     98,222       97,276   U.S. Treasury securities     6,709       12,392   Investments-trading   $ 192,805     $ 211,828      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)       June 30, 2023     December 31, 2022   Corporate bonds and redeemable preferred stock   $ 52,694     $ 61,310   Derivatives     3,771       1,177   Equity securities     198       51   U.S. government agency debt securities     5       32   U.S. government agency MBS and CMOs     5       1   U.S. Treasury securities     41,444       71,386   Trading securities sold, not yet purchased   $ 98,117     $ 133,957     The Company manages its exposure to changes in interest rates for the interest rate sensitive securities it holds by entering into offsetting short positions for 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)       June 30, 2023     December 31, 2022   Equity securities   $ 36,185     $ 13,725   Equity derivatives     1,367       -   Restricted equity securities     3,405       3,135   Corporate bonds and redeemable preferred stock     476       476   Fair value receivables     6,759       -   CREO JV     5,474       6,568   U.S. Insurance JV     3,073       3,459   SPAC Fund     -       527   Residential mortgage loans     129       132   Other investments, at fair value   $ 56,868     $ 28,022     As of June 30, 2023, $ 27,755  of unrestricted equity, $ 1,127  of restricted equity, $ 3,719  of fair value receivables, and $ 1,367  of equity derivatives represented long positions related to share forward arrangements entered into by the Company.  See description of share forward arrangements in note 9.    A total o f $ 1,464  a nd $ 1,673  of the amounts shown as other investments, at fair value above served as collateral for the Company's margin loan payable as of June 30, 2023 and December 31, 2022, respectively.  See note 6.     Other Investments Sold, Not Yet Purchased, at Fair Value   Other investments, sold not yet purchased, at fair value consisted of the following.   OTHER INVESTMENTS SOLD, NOT YET PURCHASED, AT FAIR VALUE (Dollars in Thousands)       June 30, 2023     December 31, 2022   Equity securities   $ 66     $ 78   Share forward liabilities     28,540       -   Other investments sold, not yet purchased, at fair value   $ 28,606     $ 78     As of June 30, 2023, the share forward liabilities represented derivative positions related to share forward arrangements entered into by the Company.  See description of share forward arrangements in note 9.   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 mortgage loans.   The changes in fair value (realized and unrealized gains and losses) of these instruments for which the Company has elected the fair value option are recorded 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 June 30, 2023 and 2022 of ($ 11,376 ) and ($ 7,019 ) , respectively. 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 six months ended June 30, 2023 and 2022 of ($ 13,979 ) and ($ 25,737 ), 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 June 30, 2023 and 2022 of  $ 23,046  and $ 79 , 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 six  months ended June 30, 2023 and 2022 of $ 23,051   and $ 257 , 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 that may be 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 June 30, 2023 and December 31, 2022 , 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 June 30, 2023 (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:                                 ABS   $ 1     $ -     $ 1     $ -   Corporate bonds and redeemable preferred stock     52,546       -       52,546       -   Derivatives     3,616       -       3,616       -   Equity securities     760       760       -       -   Municipal bonds     7,536       -       7,536       -   Residential mortgage loans     3,259       -       3,259       -   RMBS     8       -       8       -   U.S. government agency debt securities     20,148       -       20,148       -   U.S. government agency MBS and CMOs     98,222       -       98,222       -   U.S. Treasury securities     6,709       6,709       -       -   Total investments - trading   $ 192,805     $ 7,469     $ 185,336     $ -                                     Other investments, at fair value:                                 Equity securities   $ 36,185     $ 36,185     $ -     $ -   Equity derivatives     1,367       -       1,367       -   Restricted equity securities     3,405       -       3,405       -   Corporate bonds and redeemable preferred stock     476       -       476       -   Fair value receivables     6,759       -       6,759       -   Residential mortgage loans     129       -       129       -         48,321     $ 36,185     $ 12,136     $ -   Investments measured at NAV (1)     8,547                           Total other investments, at fair value   $ 56,868                                                             Liabilities                                 Trading securities sold, not yet purchased:                                 Corporate bonds and redeemable preferred stock   $ 52,694     $ -     $ 52,694     $ -   Derivatives     3,771       -       3,771       -   Equity securities     198       198       -       -   U.S. government agency debt securities     5       -       5       -   U.S. government agency MBS and CMOs     5       -       5       -   U.S. Treasury securities     41,444       41,444       -       -   Total trading securities sold, not yet purchased   $ 98,117     $ 41,642     $ 56,475     $ -                                    Other investments, sold not yet purchased:                                 Equity securities   $ 66     $ 66     $ -     $ -   Share forward liabilities     28,540       -       28,540       -   Total other investments sold, not yet purchased   $ 28,606     $ 66     $ 28,540     $ -     ( 1 ) As a practical expedient, the Company uses NAV (or its equivalent) to measure the fair value of its investments in the U.S. Insurance JV and the CREO JV. The U.S. Insurance JV invests in USD denominated debt issued by small insurance and reinsurance companies.  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, 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:                                 ABS   $ 1     $ -     $ 1     $ -   Corporate bonds and redeemable preferred stock     44,572       -       44,572       -   Derivatives     4,669       -       4,669       -   Equity securities     220       220       -       -   Municipal bonds     19,502       -       19,502       -   Residential mortgage loans     13,506       -       13,506       -   RMBS     7       -       7       -   U.S. government agency debt securities     19,683       -       19,683       -   U.S. government agency MBS and CMOs     97,276       -       97,276       -   U.S. Treasury securities     12,392       12,392       -       -   Total investments - trading   $ 211,828     $ 12,612     $ 199,216     $ -                                     Other investments, at fair value:                                 Equity Securities   $ 13,725     $ 13,725     $ -     $ -   Restricted Equity Securities     3,135       -       3,135       -   Corporate bonds and redeemable preferred stock     476       -       476       -   Residential mortgage loans     132       -       132       -         17,468     $ 13,725     $ 3,743     $ -   Investments measured at NAV (1)     10,554                           Total other investments, at fair value   $ 28,022                                                             Liabilities                                 Trading securities sold, not yet purchased:                                 Corporate bonds and redeemable preferred stock   $ 61,310     $ -     $ 61,310     $ -   Derivatives     1,177       -       1,177       -   Equity securities     51       51       -       -   U.S. Government Agency debt     32       -       32       -   U.S. government agency MBS and CMOs     1       -       1       -   U.S. Treasury securities     71,386       71,386       -       -   Total trading securities sold, not yet purchased   $ 133,957     $ 71,437     $ 62,520     $ -                                    Other investments, sold not yet purchased:                                 Equity securities   $ 78     $ 78     $ -     $ -   Total other investments sold, not yet purchased   $ 78     $ 78     $ -     $ -     ( 1 ) As a practical expedient, the Company uses NAV (or its equivalent) to measure the fair value of its investments in the U.S. Insurance JV, the SPAC Fund, and the CREO JV. The U.S. Insurance JV invests in USD denominated debt issued by small insurance and reinsurance companies.  The SPAC Fund invested 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.   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.   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.   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.   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.     Equity Securities Without Readily Determinable Fair Value : From time to time, the Company invests in equity securities that do not have a readily determinable fair value that also do not qualify for equity method accounting or the practical expedient for investments in investment companies, which are measured at NAV. In those cases, the Company utilizes the measurement alternative of ASC 321 - 10 - 35 - 2. This alternative allows the Company to carry the investment at cost minus impairment. If the Company observes a market transaction for an identical or similar instrument, it will adjust the carrying value of the equity security. If the equity security is being measured at cost minus impairment, it will be included as a component of other assets. If the equity security is being measured at fair value, it will be included as a component of other investments, at fair value. When measured at fair value using an orderly observable market transaction, it will generally be classified as level 1 in 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.   Fair value receivables :  Fair value receivables represent amounts receivables from third parties in connection with the Company's share forward arrangements.  See note 9.   The fair value is determined by using a financial model with observable inputs and is classified within level 2 of the fair value 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.   Residential Mortgage Loans : The Company generally values these loans using a model. The model’s main inputs are current market quotations for pooled mortgage loan securities with similar characteristics. The Company considers the inputs to be observable and therefore classifies the fair value of these loans within level 2 of 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. 23 Table of Contents   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.   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. 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.   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 may enter into equity derivatives which include listed options as well as other derivative transactions with an underlying equity instrument.  Listed options are traded on a recognized liquid exchange and the Company classifies their fair value within level 1 of the valuation hierarchy.  Other equity derivatives (where the underlying equity instrument is publicly traded but the derivative itself is not ) are classified within level 2 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.   Share forward liabilities   Share forward liabilities are included as a component of other investments sold, not yet purchased in the Company's balance sheets.  The Company considers these derivatives as level 2 within the fair value 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 were measured at fair value on a recurring basis at June 30, 2023 and December 31, 2022 .       Fair Value June 30, 2023     Unfunded Commitments     Redemption Frequency     Redemption Notice Period   Other investments, at fair value                                 CREO JV (a)   $ 5,474     $ 10,065       N/A       N/A   U.S. Insurance JV (b)     3,073       N/A       N/A       N/A       $ 8,547                                 Fair Value December 31, 2022     Unfunded Commitments     Redemption Frequency     Redemption Notice Period   Other investments, at fair value                                 CREO JV (a)   $ 6,568     $ 8,464       N/A       N/A   U.S. Insurance JV (b)     3,459       N/A       N/A       N/A   SPAC Fund (c)     527       N/A     Quarterly after 1 year lock up     30 days       $ 10,554                                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 invested 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 into 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.  From time to time, the Company hedges a portion of this exposure by entering into equity derivatives such as puts and short call options.  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  June 30, 2023 and December 31, 2022, the Company had no options. From time to time, the Company may also enter into forward purchase commitments for equity securities.     In addition, the Company may  engage in advisory transactions that result in a receivable that can be paid in cash or a variable number of equity instruments.  In such instances, the Company would record the receivable as a component of other assets in its consolidated balance sheet and record the equity component as an embedded derivative.  All equity derivatives are carried at fair value as a component of other investments, at fair value or other investments sold, not yet purchased in the Company’s consolidated balance sheets. As of  June 30, 2023  and December 31, 2022, the Company had no embedded equity derivatives.     The Company also hedges a portion of the exposure from these equity investments by entering into short trades.  These short trades are not treated as derivatives and are carried as a component of other investments sold, not yet purchased in the Company’s consolidated balance sheets.  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 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 June 30, 2023 , the Company had open TBAs and other forward MBS purchase agreements in the notional amount of $ 802,050  and open TBAs and other forward MBS sale agreements in the notional amount of $ 824,150 . At December 31, 2022 , the Company had open TBAs and other forward agency MBS purchase agreements in the notional amount of $ 535,000  and open TBAs and other forward agency MBS sale agreements in the notional amount of $ 556,780 .   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, which are 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  June 30, 2023  and  December 31, 2022 , 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 June 30, 2023 and December 31, 2022 , 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 June 30, 2023 and December 31, 2022 .     DERIVATIVE FINANCIAL INSTRUMENTS-BALANCE SHEET INFORMATION (Dollars in Thousands)     Derivative Financial Instruments Not Designated as Hedging Instruments Under FASB ASC 815   Balance Sheet Classification   June 30, 2023     December 31, 2022   TBAs and other forward agency MBS   Investments-trading   $ 3,616     $ 4,669   TBAs and other forward agency MBS   Trading securities sold, not yet purchased     ( 3,771 )     ( 1,177 ) Equity derivatives   Other investments, at fair value     1,367       -   Share forward liabilities   Other investments sold, not yet purchased, at fair value     28,540       -           $ 29,752     $ 3,492     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)             Three Months Ended June 30,   Derivative Financial Instruments Not Designated as Hedging Instruments Under FASB ASC 815   Income Statement Classification   2023     2022   TBAs and other forward agency MBS   Revenue-net trading   $ 1,531     $ 2,960   Equity derivatives   Principal transactions and other income (loss)     788       -   Share forward liabilities   Principal transactions and other income (loss)     23,039       -           $ 25,358     $ 2,960     The share forward liabilities offset certain long positions included as a component of other investments, at fair value.  The offsetting long positions had income / (loss) of $( 13,634 ) and $ 0  for the three months ended June 30, 2023 and 2022, respectively.            Six Months Ended June 30,   Derivative Financial Instruments Not Designated as Hedging Instruments Under FASB ASC 815   Income Statement Classification   2023     2022   TBAs and other forward agency MBS   Revenue-net trading   $ 1,922     $ 5,598   Equity derivatives   Principal transactions and other income (loss)     788       -   Share forward liabilities   Principal transactions and other income (loss)     23,039       -           $ 25,749     $ 5,598     The share forward liabilities offset certain long positions included as a component of other investments, at fair value.  The offsetting long positions had income / (loss) of $( 13,634 ) and $ 0  for the six months ended June 30, 2023 and 2022, respectively.     27 Table of Contents     Share Forward Arrangements    The Company has engaged in several transactions known as share forward arrangements ("SFAs"). In a typical SFA transaction, the Company acquires an interest in a publicly traded company (each referred to as the "SFA Counterparty") through open market purchases, direct acquisitions from the SFA Counterparty, or a combination thereof. These interests can take the form of unrestricted common shares, restricted common shares, equity derivatives, or fair value receivables.   Upon acquiring these interests, the Company and the SFA Counterparty enter into an SFA derivative arrangement. In cases where the Company acquires its interests in the SFA Counterparty through open market purchases, the SFA generally requires an up-front payment from the SFA Counterparty to the Company. The amount of this payment equals the cost paid by the Company for those interests, less a shortfall amount in certain cases. To fund the shortfall portion of the initial investment, the Company will utilize available cash on hand or available financing.   The SFA stipulates that the Company must make a payment to the SFA Counterparty on a certain maturity date. Depending on the terms of the SFA, this payment may be made in cash, by returning the acquired interests in kind, or through a combination of both. In some cases, the SFA requires the payment to be made exclusively in cash.   Importantly, the SFA does not obligate the Company to hold the acquired interests. Following the execution of the SFA, the Company is free to sell the interests in the SFA Counterparty (assuming the interests themselves are not restricted from transfer). Additionally, SFAs generally include a feature whereby if the Company holds the acquired interests until maturity or another agreed-upon date, it becomes eligible to receive an additional payment from the SFA Counterparty, either in cash or in additional interests in the SFA Counterparty. Such a payment is known as the "Maturity Consideration."   Furthermore, SFAs usually include a provision allowing the Company to terminate the SFA, either in whole or in part, before its maturity by making an agreed-upon payment based on an amount defined in the agreement (the “Reset Price”). The Reset Price may either remain fixed throughout the term of the SFA or fluctuate based on certain calculations within the SFA.   SFAs also impose various obligations on the SFA Counterparty. These obligations may include registering a predetermined number of the interests in the SFA Counterparty subject to the SFA with the SEC, maintaining listing on a national exchange, or ensuring that the SFA Counterparty's shares do not trade below a predetermined price for a specific period of time. If any of these SFA Counterparty obligations are breached or not satisfied, the Company may have the right to terminate the SFA early and accelerate the payment of the Maturity Consideration upon termination.  The SFAs provide the right of set off in the case of Maturity Consideration thereby allowing the Company to keep the interests it holds in the SFA Counterparty and offset the Maturity Consideration it is owed.    The Company accounts for SFA transactions as follows:     ● The interests in public companies that it owns are carried at fair value. Refer to note 8 for further details on determining the fair value of unrestricted common shares, restricted common shares, equity derivatives, or fair value receivables.   ● The derivative obligation arising from the SFA is also carried at fair value. Fair value represents the amount the Company would need to pay to settle the SFA obligation at any reporting period date. If the SFA allows the Company multiple methods of settling the obligation, the Company will choose the most advantageous one to value the derivative obligation. In performing this calculation, only settlement methods contractually available to the Company at the reporting date will be considered (i.e., ones available at some future date will not be considered). For instance, if the Company may early terminate the SFA by either returning common shares or making a cash payment based on the Reset Price, the liability will be valued at the lower of: (i) the fair value of the common shares and (ii) the cash amount based on the Reset Price.   ● The Company does not recognize any Maturity Consideration as revenue until it is earned under the contract, either by meeting the hold period requirement or due to a breach of obligation by the SFA Counterparty that enables the Company to terminate the SFA early.     ● In cases where the Company earns Maturity Consideration and the amount it is owed exceeds the fair value of the interest it owns that is available to offset, the Company will consider the probability of payment of the remaining Maturity Consideration based on the credit quality of the SFA Counterparty and general market conditions.  If the Company determines the collection of the remaining Maturity Consideration owed is not probable, the Company will not record the unpaid portion.     The following table shows the carrying value of the assets and liabilities of SFA transactions as of the reporting period dates.   SHARE FORWARD ARRANGEMENTS (Dollars in Thousands)       June 30, 2023     December 31, 2022   Equity securities   $ 27,755     $ -   Equity derivatives     1,367       -   Restricted equity securities     1,127       -   Fair value receivables     3,719       -   Share forward liabilities     ( 28,540 )     -   Net fair value of share forward arrangements   $ 5,428     $ -     28 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.     Gestation Repo   For the periods presented, all of the Company's matched book repo business consisted of gestation repo transactions.  Gestation repo involves entering into repo and reverse repo transactions 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.   Gestation trades can be structured in two ways:   On Balance Sheet : The Company executes a reverse repo with the borrower and a matching repo (with the same collateral and maturity date) with the lender. In this case, the Company is a principal to each trade and is borrowing from one counterparty and lending to another and earning net interest margin. These transactions are referred to by the Company as on balance sheet gestation repo trades.   Agency Repo : Similar to the on balance sheet repo, the Company first executes a reverse repo with the borrower and a matching repo (with the same collateral and maturity date) with the lender. However, in this case, all three parties (the borrower, the lender, and the Company) simultaneously enter into an assignment agreement. The effect of this assignment is to remove the Company as principal to the reverse repo and repo and have the lender and borrower directly face each other in a repo trade. The Company receives a fee for its role in arranging the financing. These transactions are referred to by the Company as agency gestation repo trades.   Bankruptcy of Gestation Counterparty   As of June 30, 2022, the Company had an outstanding reverse repo balance with First Guaranty Mortgage Corporation (“FGMC”) totaling $ 269,228 . Effective June 30, 2022, FGMC filed for bankruptcy. Subsequent to June 30, 2022, the Company issued a default notice to FGMC under the reverse repo. The Company took possession of the collateral and began liquidating it.   As of  June 30, 2023  and December 31, 2022, the Company had liquidated all of the collateral with the exception of $ 3,259  and $ 13,506 of residential mortgage loans, respectively. These loans are carried at fair value and are included in investments-trading in the consolidated balance sheets.   During the year ended December 31, 2022, the Company recorded a gross loss of $ 5,454 in connection with the FGMC reverse repo. Of the $ 5,454 loss, $ 5,244 was recorded as a reduction in net trading revenue and $ 210 was recorded in professional fees and other operating expense in the Company's statement of operations. The Company has filed an unsecured claim under the bankruptcy proceeding related to this loss but does not expect to receive a material recovery. To the extent any recovery of this loss is received, the Company will recognize it on a cash basis as received, as a component of net trading revenue. During the year ended December 31, 2022, in connection with the loss, the Company recorded a reversal of accrued incentive compensation of $ 1,753 , therefore, the net impact to the Company's earnings was $ 3,701 .   During the six  months ended June 30, 2023, the Company recorded an additional loss of $ 1,478 , which was included as a component of net trading revenue related to the decline in fair value of the remaining collateral.     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.    Repo Information     As of  June 30, 2023 and December 31, 2022 , the Company held reverse repos of $ 457,528  and $ 437,692 , respectively, and the fair value of collateral received under reverse repos was $ 465,693  and $ 440,681 , respectively.     As of  June 30, 2023 and December 31, 2022 , the Company held repos of $ 457,351  and $ 452,797 , respectively, and the fair value of securities and cash pledged as collateral under repos was $ 465,546  and $ 454,770 , respectively. These amounts include collateral for reverse repos that were re-pledged as collateral for repos.   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.    29 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 June 30, 2023 and December 31, 2022 , the Company’s gestation reverse repos shown in the tables below represented balances from  8 and 8  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 (net interest margin and fee revenue) was $ 4,015  and $ 8,396 for the three and six months ended June 30, 2023 , respectively. The total net revenue earned by the Company on its matched book repo business was $ 7,862  and $ 17,634  for the  three and six months ended June 30, 2022 , respectively.   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 transactions, 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) June 30, 2023       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)   $ -     $ 457,351     $ -     $ -     $ 457,351       $ -     $ 457,351     $ -     $ -     $ 457,351         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)   $ -     $ 457,528     $ -     $ -     $ 457,528       $ -     $ 457,528     $ -     $ -     $ 457,528       SECURED BORROWINGS (Dollars in Thousands) December 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)   $ -     $ 452,797     $ -     $ -     $ 452,797       $ -     $ 452,797     $ -     $ -     $ 452,797         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)   $ -     $ 437,692     $ -     $ -     $ 437,692       $ -     $ 437,692     $ -     $ -     $ 437,692     30 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 statement of cash flows. Any excess distributions would be considered as return of investment 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 24.   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)       INSU Acquisition Corp. III     Dutch Real Estate Entities     SPAC Sponsor Entities and Other     Total   January 1, 2023   $ -     $ 5,530     $ 3,399     $ 8,929   Investments / advances     -       -       1,124       1,124   Distributions / repayments     -       -       ( 3 )     ( 3 ) Reclasses to (from)     -       -       ( 362 )     ( 362 ) Earnings / (loss) recognized     -       212       ( 1,118 )     ( 906 ) June 30, 2023   $ -     $ 5,742     $ 3,040     $ 8,782         INSU Acquisition Corp. III     Dutch Real Estate Entities     SPAC Sponsor Entities and Other     Total   January 1, 2022   $ 4,543     $ 5,600     $ 38,095     $ 48,238   Investments / advances     1,355       -       1,259       2,614   Distributions / repayments     -       -       ( 77 )     ( 77 ) Reclasses to (from)     -       -       ( 20,915 )     ( 20,915 ) Earnings / (loss) recognized     ( 5,898 )     ( 70 )     ( 14,963 )     ( 20,931 ) December 31, 2022   $ -     $ 5,530     $ 3,399     $ 8,929     Dutch Real Estate Entities include: (i) Amersfoot Office Investment I Cooperatief U. A. (“AOI”), a company based in the Netherlands that invests in real estate, and (ii) CK Capital Partners B.V. (“CK Capital”), a company based in the Netherlands that manages investments in real estate.  See note 24.   INSU Acquisition Corp. III completed its $ 218 million IPO in December 2020 and was liquidated in December 2022 without completing a business combination within the required time period. See note 4.   The amounts included as SPAC Sponsor Entities and other represent the Company's investment in SPAC sponsor entities that have not yet completed a business combination.  If these SPAC sponsor entities are unsuccessful in completing a business combination and the underlying SPAC liquidates, the Company will likely receive no distributions in kind or in cash related to these investments and the remaining balances will be recorded as a component of loss from equity method investments in the consolidated statement of operations.   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 ASC 842, the Company determines if an arrangement is a lease at the inception date of the contract. Then, the Company measures the lease liability using an incremental borrowing rate that 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  June 30, 2023 , all of the leases to which the Company was a party were operating leases.  The weighted average remaining term of the leases was 5.3  years.  The weighted average discount rate for the leases was 4.64 %.   Maturities of operating lease liability payments consisted of the following.   FUTURE MATURITY OF LEASE LIABILITIES (Dollars in Thousands)       June 30, 2023   2023 - remaining   $ 1,364   2024     2,174   2025     1,797   2026     1,509   2027     1,517   Thereafter     2,253   Total     10,614   Less imputed interest     ( 1,249 ) Lease obligation   $ 9,365     During the six months ended June 30, 2023 and 2022 , total cash payments of $ 1,223  and $ 1,122 , 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 and six months ended June 30, 2023 , rent expense, net of sublease income of $ 22  and $ 48 , respectively, was $ 634  and $ 1,264 , respectively.  For the three and six months ended June 30, 2022 , rent expense, net of sublease income of $ 25  and $ 50 , respectively, was $ 640  and $ 1,279 , respectively.   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)       June 30, 2023     December 31, 2022   Asset management fees receivable   $ 1,035     $ 936   New issue fee receivable     1,120       167   Cash collateral due from counterparties     432       4,301   Accrued interest receivable and dividend receivable     1,768       2,561   Revenue share receivable     240       138   Agency repo income receivable     429       806   Miscellaneous other receivables     710       618   Other receivables   $ 5,734     $ 9,527     Asset management fees receivable are of a routine and short-term nature.  These amounts are generally accrued monthly and paid on a monthly or quarterly basis.   New issue fee receivable represents fees due for new issue and advisory services.    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).  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).    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.   Agency repo income receivable represents income receivable on gestation repo trades.  See note 10.   Miscellaneous other receivables represent other receivables that are of a short-term nature.   Other assets consisted of the following.   OTHER ASSETS (Dollars in Thousands)       June 30, 2023     December 31, 2022   Deferred costs   $ 76     $ 133   Prepaid expenses     1,475       1,325   Prepaid taxes     885       -   Deposits     453       450   Furniture, equipment, and leasehold improvements, net     1,397       1,472   Intangible assets     166       166   Other assets   $ 4,452     $ 3,546     Deferred costs and prepaid expenses represent amounts paid for services that are being amortized over their expected period of use and benefit.  They are all routine and short-term in nature.  Deposits are amounts held by landlords or other parties that will be returned or offset upon satisfaction of a lease or other contractual arrangement.  See note  16 to the Company’s consolidated financial statements included in its Annual Report on Form 10 -K for the year ended December 31, 2022 for further discussion of the Company’s furniture, equipment, and leasehold improvements.  Intangible assets represent the carrying value of the JVB broker-dealer license.    33 Table of Contents   Accounts payable and other liabilities consisted of the following.   ACCOUNTS PAYABLE AND OTHER LIABILITIES (Dollars in Thousands)       June 30, 2023     December 31, 2022   Accounts payable   $ 1,210     $ 891   Redeemable financial instruments accrued interest     83       -   Accrued income tax     -       70   Accrued interest payable     482       452   Accrued interest on securities sold, not yet purchased     1,104       1,561   Payroll taxes payable     894       1,565   Counterparty cash collateral     147       4,301   Accrued expense and other liabilities     4,593       2,599   Accounts payable and other liabilities   $ 8,513     $ 11,439     The redeemable financial instrument accrued interest represents accrued interest on the JKD Investor 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, it provides collateral to its 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 23.    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:   CARRYING VALUE OF CONSOLIDATED VARIABLE INTEREST ENTITIES (Dollars in Thousands)       June 30, 2023     December 31, 2022   Cash and cash equivalents   $ 5,014     $ 19   Due from broker     3,271       -   Other investments, at fair value     31,178       -   Investment in equity method affiliates     43       23   Non-controlling interest     ( 6,654 )     ( 15 ) Investment in consolidated VIEs   $ 32,852     $ 27     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 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 borrowed was $ 0  and $ 0  as of  June 30, 2023  and December 31, 2022, 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  June 30, 2023  and December 31, 2022,  there were $ 10,065   and $ 8,464 , respectively, of unfunded commitments to VIEs in which the Company had invested.  Other than its investment in these entities, the Company did not provide financial support to these VIEs during the three and six months ended June 30, 2023 and 2022 and had no liabilities, contingent liabilities, or guarantees (implicit or explicit) related to these VIEs at June 30, 2023 and December 31, 2022 .  See table below.    For each investment management contract entered into by the Company, the Company assesses whether the entity being managed is a VIE and if the Company is 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 June 30, 2023 and December 31, 2022 .   CARRYING VALUE OF VARIABLE INTERESTS IN NON-CONSOLIDATED VARIABLE INTEREST ENTITIES (Dollars in Thousands)       June 30, 2023     December 31, 2022   Other investments, at fair value   $ 8,547     $ 10,554   Investments in equity method affiliates     3,040       3,376   Maximum exposure   $ 11,587     $ 13,930      35 Table of Contents     15.   REDEEMABLE FINANCIAL INSTRUMENTS   Redeemable financial instruments consisted of the following.   REDEEMABLE FINANCIAL INSTRUMENTS (Dollars in Thousands)       June 30, 2023     December 31, 2022   JKD Capital Partners I LTD   $ 7,868     $ 7,868       $ 7,868     $ 7,868    On February 13, 2023, the Operating LLC and JKD Investor entered into Amendment No. 2 (the “JKD Amendment") to the Investment Agreement, dated October 3, 2016, as amended (the “JKD Investment Agreement”). As a result of the JKD Amendment, effective as of January 1, 2023, the term “Team Expenses” (which expenses reduce the investment return amount payable to JKD Investor under the JKD Investment Agreement) in the JKD Investment Agreement was amended to mean an amount equal to (i) $ 150  per calendar quarter (or $ 600  per year), plus (ii) any direct expenses (as described in the JKD Investment Agreement). Prior to the JKD Amendment, the term “Team Expenses” in the JKD Investment Agreement was defined to mean an amount equal to (i) $ 175  per calendar quarter (or $ 700  per year), plus (ii) any direct expenses.   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   June 30, 2023     December 31, 2022   Rate Terms   Interest (2)   Maturity Non-convertible debt:                           10.00% senior note (the "2020 Senior Notes")   $ 4,500     $ 4,500   Fixed   10.00%   January 2024                             Junior subordinated notes: (1)                           Alesco Capital Trust I     28,125       28,125   Variable   9.30%   July 2037 Sunset Financial Statutory Trust I     20,000       20,000   Variable   9.31%   March 2035 Less unamortized discount     ( 23,301 )     ( 23,601 )                 24,824       24,524                                         Byline Bank     -       -   Variable   NA   December 2023 Total   $ 29,324     $ 29,024                 ( 1 ) The junior subordinated notes listed represent debt the Company owes to the two trusts noted above. The total par amount owed by the Company to the trusts is $49,614.   However, the Company owns the common stock of the trusts in a total par amount of $1,489.   The Company pays interest (and at maturity, principal) 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 June 30, 2023 on a combined basis was 21.09 % assuming the variable rate in effect on the last day of the reporting period remains in effect until maturity.   ( 2 ) Represents the interest rate in effect as of the last day of the reporting period.    37 Table of Contents    The 2020 Senior Notes   On January 31, 2022, the Operating LLC and JKD Investor entered into a note purchase agreement (the "2022 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 Investor (i) the original principal amount of $2,250  paid by JKD Investor to the Operating LLC under the Original Purchase Agreement, plus (ii) the additional $2,250  paid by JKD Investor 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 could not be prepaid in whole or in part prior to January 31, 2023. The Amended and Restated Note may, with at least 31 days’ 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 LLC 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 Trust.   Pursuant to the 2017 Convertible Note Purchase Agreement, the DGC Trust agreed to purchase from the Operating LLC, and the Operating LLC agreed to issue and to sell to the DGC 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 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 Note 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 Trust offered customary indemnifications.  Further, the Operating LLC and the DGC Trust provided each other with customary representations and warranties, the Company provided limited representations and warranties to the DGC 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 provided, among other things, that the board of managers would 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 provided that Daniel G. Cohen would 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 could, in its sole discretion, extend the maturity date for an additional one -year period, in each case unless the 2017 Convertible Note was earlier converted into units of membership interests in the Operating LLC at the conversion rate of $ 1.45 per unit.    Effective March 10, 2020, the Operating LLC exercised its option to extend the 2017 Convertible Note's maturity date to March 10, 2022.     On March 20, 2022, the DGC Trust elected to convert the 2017 Convertible Note into an aggregate of 10,344,827 units of membership interest in the Operating LLC at the conversion rate specified in the 2017 Convertible Note of $ 1.45 per unit. As a result of such conversion, the 2017 Convertible Note was cancelled in its entirety.   Pursuant to the terms and conditions of the Operating LLC’s Amended and Restated Limited Liability Company Agreement, dated December 16, 2009, as amended, a holder of LLC units of membership interest ("LLC Units") may cause the Operating LLC to redeem such LLC Units 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 LLC Units  Accordingly, the LLC Units were redeemed 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 LLC Units, 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.   38 Table of Contents   Junior Subordinated Notes   The Company assumed $ 49,614 aggregate principal amount of junior subordinated notes outstanding at the time of the AFN Merger. The Company recorded the debt at fair value on the acquisition date. Any difference between the fair value of the junior subordinated notes on the AFN Merger date and the principal amount of debt is amortized into earnings over the estimated remaining life of the underlying debt as an adjustment to interest expense.   The junior subordinated notes are payable to two special purpose trusts:   1. Alesco Capital Trust I : $ 28,995 in aggregate principal amount issued in June 2007.  The notes mature on July  30, 2037 and may be called by the Company at any time. The notes accrue interest payable quarterly at a floating interest rate equal to the appropriate variable base rate plus 400 basis points per annum through July  30, 2037. All principal is due at maturity. Alesco Capital Trust I simultaneously issued 870  shares of Alesco Capital Trust I’s common securities to the Company for a purchase price of $ 870 , which constitutes all of the issued and outstanding common securities of Alesco Capital Trust I.   2. Sunset Financial Statutory Trust I ( “ Sunset Financial Trust ” ) : $ 20,619 in aggregate principal amount issued in March 2005. The notes mature on March  30, 2035. The notes accrue interest payable quarterly at a floating interest rate equal to the appropriate variable base rate plus 415 basis points. All principal is due at maturity. Sunset Financial Trust simultaneously issued 619 shares of Sunset Financial Trust’s common securities to the Company for a purchase price of $ 619 , which constitutes all of the issued and outstanding common securities of Sunset Financial Trust.   Alesco Capital Trust I and Sunset Financial Trust (collectively, the “Trusts”) described above are VIEs pursuant to variable interest provisions included in FASB ASC 810 because the holders of the equity investment at risk do not have adequate decision making ability over the Trusts’ activities. The Company is not the primary beneficiary of the Trusts as it does not have the power to direct the activities of the Trusts. The Trusts are not consolidated by the Company and, therefore, the Company’s consolidated financial statements include the junior subordinated notes issued to the Trusts as a liability, and the investment in the Trusts’ common securities as an asset. The common securities were deemed to have a fair value of $ 0 as of the AFN Merger date. These are accounted for as cost method investments; therefore, the Company does not adjust the value at each reporting period. Any income generated on the common securities is recorded as interest income, a component of interest expense, net, in the consolidated statement of operations.   The junior subordinated notes have several financial covenants. Since the AFN Merger, Cohen & Company Inc. has been in violation of one covenant of Alesco Capital Trust I. As a result of this violation, Cohen & Company Inc. is prohibited from issuing additional debt that is either subordinated to or pari passu with Alesco Capital Trust I debt. This violation does not prohibit Cohen & Company Inc. from issuing senior debt or the Operating LLC from issuing debt of any kind. Cohen & Company Inc. is in compliance with all other covenants of the junior subordinated notes. The Company does not consider this violation to have a material adverse impact on its operations or on its ability to obtain financing in the future.   The U.K. Financial Conduct Authority (the authority that regulated LIBOR) announced that it would cease publication of the most commonly used U.S. dollar LIBOR tenors after June 30, 2023, though the less commonly used tenors ceased publication on December 31, 2021.    The junior subordinated notes payable to both Alesco Capital Trust I and Sunset Financial Trust initially incurred interest that was calculated based on LIBOR. The junior subordinated notes payable to Alesco Capital Trust I provided for the manner in which interest is calculable under such notes if LIBOR is no longer published. As a result, once LIBOR was no longer published, the interest payable under the junior subordinated notes payable to Alesco Capital Trust I instead bears interest with reference to a floating rate equal to the “Base Rate,” plus 4 % where "Base Rate" will be calculated as the greater of (i) the "prime rate" for dollar denominated loans quoted by leading banks in the City of New York and (ii) the "Federal Funds Rate," (which will be calculated as the weighted average of the rate on overnight federal funds transactions with members of the Federal Reserve System only arranged by federal funds brokers, as published as of such day by the Federal Reserve Bank of New York, plus 0.50% per annum).   The junior subordinated notes payable to Sunset Financial Trust did not provide for the manner in which interest is calculable under such notes if LIBOR is no longer published. As a result, once LIBOR was no longer published, the interest payable under the junior subordinated notes payable to Sunset Financial Trust is payable in accordance with the Adjustable Interest Rate (LIBOR) Act of 2021 (the “LIBOR Act”). The LIBOR Act was passed to provide a clear and uniform federal solution for transitioning existing U.S. law contracts that either lack or contain insufficient contractual provisions addressing the permanent cessation of LIBOR by providing for the transition to a replacement rate, which is based on the Secured Overnight Financing Rate ("SOFR"), a new index calculated by short-term repurchase agreements, backed by U.S. Treasury securities.   39 Table of Contents   Byline Bank   On June 9, 2023, Byline Bank and JVB entered into the Third Amended and Restated Agreement (the "Third Amended and Restated Agreement"), which amended and restated the previous agreement in its entirety. The primary purposes of the Third Amended and Restated Agreement was to (i) decrease the loan commitment of Byline Bank thereunder from $ 25,000  to $ 15,000 , and (ii) decrease the amount of tangible net worth that JVB was required to maintain from $85,000  through June 30, 2023 ( and $90,000 thereafter) to $ 70,000  at all times during the term of the Third Amended and Restated Agreement.   Pursuant to the Third Amended and Restated Agreement, Byline Bank agreed to make loans to JVB, at JVB’s request from time to time, in the aggregate amount of up to $ 15,000 . In April 2023, the Company drew $ 15,000 under the Third Amended and Restated Agreement and the previous agreement and repaid it in full as of June 30, 2023.   Loans (both principal and interest) made by Byline Bank to JVB under the Third Amended and Restated Agreement are scheduled to mature and become immediately due and payable in full on December 21, 2023. In addition, loans may be made under the Third Amended and Restated Agreement until December 21, 2023.   Loans under the Third Amended and Restated Agreement will bear interest at a per annum rate equal to the Term SOFR Rate (as such term is defined in the Third Amended and Restated Agreement) 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 $15,000  commitment under the Third Amended and Restated Agreement. JVB is also required to pay on each anniversary date of the Third Amended and Restated Agreement a commitment fee at a per annum rate equal to 0.50 % of Byline Bank’s $15,000  commitment under the Third Amended and Restated Agreement. Pursuant to the terms of the Third Amended and Restated Agreement, JVB paid to Byline Bank a commitment fee of $ 75 .   JVB may request a reduction of Byline Bank's  $15,000  commitment in a minimum amount of $ 1,000  and multiples of $ 500  thereafter or such lesser amount as would bring the $15,000  loan commitment to the total principal amount of loans advanced under the Third Amended and Restated Agreement.       The obligations of Byline Bank under the Third Amended and Restated Agreement are guaranteed by the Company, the Operating LLC, and JVB, and are secured by a lien on all of JVB's property, including its 100 % ownership interest in all of the outstanding units of membership interests of JVB.   The Third Amended and Restated Agreement includes customary covenants for a transaction of this type, including covenants limiting the indebtedness that can be incurred by JVB and Holdings LP and restricting JVB’s ability to make certain loans and investments. Additionally, under the Third Amended and Restated Agreement, JVB may not permit its (i) tangible net worth to be less than $70,000  and (ii) excess net capital to be less than $ 40,000  at any time following June 9, 2023. Further, any loans outstanding under the Third Amended and Restated Agreement may not exceed 0.25 times JVB’s tangible net worth.   Pursuant to the Third Amended and Restated 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 under the Third Amended and Restated Agreement may not exceed $ 10,000 .   The Third Amended and Restated Agreement provides customary representations and warranties for a transaction of this type. If an event of default under the Third Amended and Restated Agreement 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 Third Amended and Restated Agreement to become immediately due and payable.   As of  June 30, 2023 and  2022, no amounts were outstanding under the Third Amended and Restated Agreement or the previous agreement, and the Company was in compliance with all financial covenants thereunder.   40 Table of Contents     Interest Expense, net     INTEREST EXPENSE (Dollars in Thousands)       Three Months Ended June 30,     Six Months Ended June 30,       2023     2022     2023     2022   Junior subordinated notes   $ 1,276     $ 756     $ 2,485     $ 1,413   2020 Senior Notes     112       112       223       231   2017 Convertible Note     -       -       -       327   Byline Bank     158       62       223       134   Redeemable Financial Instrument - JKD Capital Partners I LTD     84       176       291       352       $ 1,630     $ 1,106     $ 3,222     $ 2,457       41 Table of Contents     17. EQUITY     Stockholders’ Equity   Common Equity : The following table reflects the activity for the six months ended June 30, 2023 related to the number of shares of unrestricted Common Stock that the Company had issued.       Common Stock       Shares   December 31, 2022     1,433,283   Vesting of shares     108,901   Shares withheld for employee taxes and retired     ( 20,328 ) June 30, 2023     1,521,856     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 June 30, 2023 . 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, 2022 .   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, 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 has 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  June 30, 2023 , 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, 2022 .   Cash Dividends   On each of March 7, 2023 and May 4, 2023, the Company's board of directors declared a quarterly cash dividend of $ 0.25 per share on its Common Stock.  The dividends were paid on April 5, 2023 and June 2, 2023, respectively to stockholders of record on March 22, 2023 and May 18, 2023, respectively.    During the six months ended June 30, 2023 , 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.       Six Months Ended       June 30, 2023   Other units related to UIS Agreement     885,730   Total     885,730     The Company recognized a net increase in additional paid in capital of $ 612  and a net decrease in AOCI of $ 13  with an offsetting decrease in non-controlling interest of $ 599  in connection with the acquisition and surrender of additional units of the Operating LLC during the six months ended June 30, 2023 . 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 six months ended June 30, 2023 and 2022 .         For the Six Months Ended June 30,       2023     2022   Net income / (loss) attributable to Cohen & Company Inc.   $ ( 9,238 )   $ ( 9,469 ) 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     612       ( 381 ) Changes from net income / (loss) attributable to Cohen & Company Inc. and transfers (to) from the non-controlling interest   $ ( 8,626 )   $ ( 9,850 )   42 Table of Contents   Detail of Non-Controlling Interest   ROLLFORWARD OF NON-CONTROLLING INTERESTS (Dollars in Thousands)       Operating LLC     Other Consolidated Subsidiaries     Total   December 31, 2022   $ 47,270     $ 17     $ 47,287   Non-controlling interest share of income (loss)     ( 8,108 )     6,600       ( 1,508 ) Other comprehensive income (loss)     42       -       42   Acquisition / (surrender) of additional units of consolidated subsidiary     ( 599 )     -       ( 599 ) Equity-based compensation     1,593       -       1,593   Shares withheld for employee taxes     ( 127 )     -       ( 127 ) Investment in non-convertible non-controlling interest of Operating LLC     -       39       39   Distributions to convertible non-controlling interest of Cohen & Company Inc.     ( 2,266 )     -       ( 2,266 ) Redemption of convertible non-controlling interest units     ( 834 )     -       ( 834 ) June 30, 2023   $ 36,971     $ 6,656     $ 43,627     The Operating LLC non-controlling interest is included as convertible non-controlling interest in the consolidated statement of operations.  The other components of non-controlling interest are included as non-convertible non-controlling interest in the statement of operations.  See note 16.   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, 2022, for a discussion of the Company’s non-controlling interests.   43 Table of Contents     18. INCOME TAXES    Cohen & Company Inc. is treated as a C corporation for United States federal income tax purposes. A U.S. C corporation is subject to a federal tax rate of 21%.   The Company's effective tax rate is significantly different than this rate for the following reasons:   1.   Cohen & Company Inc. consolidates the Operating LLC but only owns a minority economic interest in the Operating LLC.  For the  six  months ended June 30, 2023 , Cohen & Company Inc. owned 27.31 % of the economic interests of the Operating LLC (on average) and was allocated the same percentage of income/(loss) generated by the Operating LLC.  To the extent Cohen & Company Inc. incurs tax obligations on this, the related tax expense is recognized in these consolidated financial statements.  The remaining 72.69 % that is allocated to the non-controlling members of the Operating LLC is subject to taxation on such members' tax returns.     2. The Operating LLC itself consolidates certain pass-through entities.  Therefore, the income/(loss) of these entities is included in the Company's consolidated results but no tax expense/(benefit) related to the unowned portion is included.     3.   There are state, local, and foreign taxes to which the Operating LLC or its subsidiaries are subject to, which are included in the effective tax rate.     4.   The Company also has valuation allowances applied against its carryforward (net operating loss, "NOL," and net capital loss, "NCL") deferred tax assets as well as its 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 periods.     The following table presents the components on the Company's consolidated provision for income tax for the periods presented.        For the Six Months Ended June 30,       2023     2022     Change   Current   $ (469 )   $ 411     $ 880   Deferred     6,603       1,362       (5,241 ) Total   $ 6,134     $ 1,773     $ (4,361 )   Of the $ 6,134 of income tax expense recognized during the six months ended June 30, 2023, $ 5,644 represented deferred income tax expense recorded as a result of an increase in the valuation allowance recorded against the Company's carryforward assets.  The Company currently expects to have federal NOL carryforwards of $ 98,819 , federal NCL carryforwards of $ 59,729 , as well as significant state NOL carryforwards in several states and cities where it does business as of December 31, 2023.  According to ASC 740   Income Taxes, the Company should record an offsetting valuation allowance against these deferred tax assets in an amount such that the net asset recognized represents amounts that the Company believes are more likely than not to be realized.  In making this determination, the Company must estimate the future amounts of taxable income it will generate in each taxing jurisdiction.  It then must consider the remaining statutory time period available for each carryforward asset, as well as other statutory limitations on usage such as annual limits and income type limits (capital vs. ordinary).  Due to significant losses incurred recently as well as overall market conditions the Company faces generally, the Company revised downward in the quarter ended June 30, 2023 the amount of carryforward assets it believes will be realizable in the future above a more likely than not standard.  Accordingly, the Company increase the valuation allowances it had recorded in the quarter ended June 30, 2023, resulting in $5,644 of additional deferred tax expense.       44 Table of Contents     19 . 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 June 30, 2023 , JVB's minimum required net capital was $ 250 , and actual net capital was $ 50,520 , which exceeded the minimum requirements by $ 50,270 .  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   June 30, 2023 , the total minimum required net liquid capital was $ 497  and actual net liquid capital in CCFESA was $ 1,269 , which exceeded the minimum requirement by $ 772 . CCFEL cancelled its license with the CBI effective April 7, 2022.   45 Table of Contents      20 . 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 June 30,     Six Months Ended June 30,       2023     2022     2023     2022   Net income / (loss) attributable to Cohen & Company Inc.   $ ( 6,601 )   $ ( 1,857 )   $ ( 9,238 )   $ ( 9,469 ) Add: Net income (loss) attributable to the convertible non-controlling interest of Cohen & Company Inc.     -       ( 6,228 )     -       -   Add / (deduct): Adjustment (2)     -       ( 172 )     -       -   Net income / (loss) on a fully converted basis   $ ( 6,601 )   $ ( 8,257 )   $ ( 9,238 )   $ ( 9,469 )                                   Weighted average common shares outstanding - Basic     1,520,122       1,428,237       1,504,819       1,411,596   Unrestricted Operating LLC Units exchangeable into Cohen & Company Inc. shares (1)     -       3,965,405       -       -   Restricted units or shares     -       -       -       -   Weighted average common shares outstanding - Diluted (3)     1,520,122       5,393,642       1,504,819       1,411,596                                     Net income / (loss) per common share - Basic   $ ( 4.34 )   $ ( 1.30 )   $ ( 6.14 )   $ ( 6.71 )                                   Net income / (loss) per common share - Diluted   $ ( 4.34 )   $ ( 1.53 )   $ ( 6.14 )   $ ( 6.71 )   ( 1 ) The LLC Units 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 LLC Units 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 LLC Units are not included in the computation of basic earnings per share.  These LLC 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 LLC Units had been converted at the beginning of the period. ( 3 ) Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:       Three Months Ended June 30,     Six Months Ended June 30,       2023     2022     2023     2022   Unrestricted LLC Units exchangeable into Cohen & Company Inc. shares     4,014,250       -       4,006,109       3,504,604   2017 Convertible Note Units     -       -       -       448,276   Restricted Common Stock     455       5,554       7,534       12,394   Restricted Operating LLC Units     -       1,653       1,268       5,149         4,014,705       7,207       4,014,911       3,970,423     46 Table of Contents     21. COMMITMENTS AND CONTINGENCIES   Legal and Regulatory Proceedings   From time to time, the Company is a party to various routine legal proceedings, claims, and regulatory inquiries arising out of the ordinary course of the Company’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.    47 Table of Contents      22. 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 Six Months Ended June 30, 2023       Capital     Asset     Principal     Segment     Unallocated               Markets     Management     Investing     Total     (1 )   Total   Net trading   $ 15,626     $ -     $ -     $ 15,626     $ -     $ 15,626   Asset management     -       3,630       -       3,630       -       3,630   New issue and advisory     2,295       -       -       2,295       -       2,295   Principal transactions and other income     1       472       9,372       9,845       -       9,845   Total revenues     17,922       4,102       9,372       31,396       -       31,396   Compensation     13,614       2,612       701       16,927       3,611       20,538   Other Operating Expense     7,269       1,216       338       8,823       2,519       11,342   Total operating expenses     20,883       3,828       1,039       25,750       6,130       31,880   Operating income (loss)     ( 2,961 )     274       8,333       5,646       ( 6,130 )     ( 484 ) Interest income (expense)     ( 223 )     -       -       ( 223 )     ( 2,999 )     ( 3,222 ) Income (loss) from equity method affiliates     -       -       ( 906 )     ( 906 )     -       ( 906 ) Income (loss) before income taxes     ( 3,184 )     274       7,427       4,517       ( 9,129 )     ( 4,612 ) Income tax expense (benefit)     -       -       -       -       6,134       6,134   Net income (loss)     ( 3,184 )     274       7,427       4,517       ( 15,263 )     ( 10,746 ) Less: Net income (loss) attributable to the non-convertible non-controlling interest of the Operating LLC     -       17       6,583       6,600       -       6,600   Enterprise net income (loss)     ( 3,184 )     257       844       ( 2,083 )     ( 15,263 )     ( 17,346 ) Less: Net income (loss) attributable to the convertible non-controlling interest of Cohen & Company Inc.     -       -       -       -       ( 8,108 )     ( 8,108 ) Net income (loss) attributable to Cohen & Company Inc.   $ ( 3,184 )   $ 257     $ 844     $ ( 2,083 )   $ ( 7,155 )   $ ( 9,238 )                                                   Other statement of operations data                                                 Depreciation and amortization (included in total operating expense)   $ -     $ 3     $ -     $ 3     $ 290     $ 293     48 Table of Contents   SEGMENT INFORMATION Statement of Operations Information Six Months Ended June 30, 2022       Capital     Asset     Principal     Segment     Unallocated               Markets     Management     Investing     Total     (1 )   Total   Net trading   $ 22,399     $ -     $ -     $ 22,399     $ -     $ 22,399   Asset management     -       3,787       -       3,787       -       3,787   New issue and advisory     7,251       -       -       7,251       -       7,251   Principal transactions and other income     1       343       ( 25,309 )     ( 24,965 )     -       ( 24,965 ) Total revenues     29,651       4,130       ( 25,309 )     8,472       -       8,472   Compensation     17,687       2,853       410       20,950       5,143       26,093   Other Operating Expense     6,677       953       348       7,978       2,441       10,419   Total operating expenses     24,364       3,806       758       28,928       7,584       36,512   Operating income (loss)     5,287       324       ( 26,067 )     ( 20,456 )     ( 7,584 )     ( 28,040 ) Interest (expense) income     ( 134 )     -       -       ( 134 )     ( 2,323 )     ( 2,457 ) Income (loss) from equity method affiliates     -       -       ( 15,148 )     ( 15,148 )     -       ( 15,148 ) Income (loss) before income taxes     5,153       324       ( 41,215 )     ( 35,738 )     ( 9,907 )     ( 45,645 ) Income tax expense (benefit)     -       -       -       -       1,773       1,773   Net income (loss)     5,153       324       ( 41,215 )     ( 35,738 )     ( 11,680 )     ( 47,418 ) Less: Net income (loss) attributable to the non-convertible non-controlling interest of the Operating LLC     -       -       ( 18,871 )     ( 18,871 )     -       ( 18,871 ) Enterprise net income (loss)     5,153       324       ( 22,344 )     ( 16,867 )     ( 11,680 )     ( 28,547 ) Less: Net income (loss) attributable to the convertible non-controlling interest of Cohen & Company Inc.     -       -       -       -       ( 19,078 )     ( 19,078 ) Net income (loss) attributable to Cohen & Company Inc.   $ 5,153     $ 324     $ ( 22,344 )   $ ( 16,867 )   $ 7,398     $ ( 9,469 )                                                   Other statement of operations data                                                 Depreciation and amortization (included in total operating expense)   $ -     $ 2     $ -     $ 2     $ 273     $ 275     49 Table of Contents   SEGMENT INFORMATION Statement of Operations Information Three Months Ended June 30, 2023       Capital     Asset     Principal     Segment     Unallocated               Markets     Management     Investing     Total     (1)     Total   Net trading   $ 7,416     $ -     $ -     $ 7,416     $ -     $ 7,416   Asset management     -       1,605       -       1,605       -       1,605   New issue and advisory     1,395       -       -       1,395       -       1,395   Principal transactions and other income     -       232       11,924       12,156       -       12,156   Total revenues     8,811       1,837       11,924       22,572       -       22,572   Compensation     6,668       1,181       466       8,315       1,686       10,001   Other Operating Expense     3,620       648       121       4,389       1,183       5,572   Total operating expenses     10,288       1,829       587       12,704       2,869       15,573   Operating income (loss)     ( 1,477 )     8       11,337       9,868       ( 2,869 )     6,999   Interest income (expense)     ( 157 )     -       -       ( 157 )     ( 1,473 )     ( 1,630 ) Income (loss) from equity method affiliates     -       -       ( 511 )     ( 511 )     -       ( 511 ) Other non-operating income     -       -       -       -       -       -   Income (loss) before income taxes     ( 1,634 )     8       10,826       9,200       ( 4,342 )     4,858   Income tax expense (benefit)     -       -       -       -       5,550       5,550   Net income (loss)     ( 1,634 )     8       10,826       9,200       ( 9,892 )     ( 692 ) Less: Net income (loss) attributable to the non-convertible non-controlling interest of the Operating LLC     -       ( 97 )     6,600       6,503             6,503   Enterprise net income (loss)     ( 1,634 )     105       4,226       2,697       ( 9,892 )     ( 7,195 ) Less: Net income (loss) attributable to the convertible non-controlling interest of Cohen & Company Inc.     -       -       -       -       ( 594 )     ( 594 ) Net income (loss) attributable to Cohen & Company Inc.   $ ( 1,634 )   $ 105     $ 4,226     $ 2,697     $ ( 9,298 )   $ ( 6,601 )                                                   Other statement of operations data                                                 Depreciation and amortization (included in total operating expense)   $ -     $ 2     $ -     $ 2     $ 147     $ 149     50 Table of Contents   SEGMENT INFORMATION Statement of Operations Information Three Months Ended June 30, 2022       Capital     Asset     Principal     Segment     Unallocated               Markets     Management     Investing     Total     (1)     Total   Net trading   $ 10,377     $ -     $ -     $ 10,377     $ -     $ 10,377   Asset management     -       1,898       -       1,898       -       1,898   New issue and advisory     3,481       -       -       3,481       -       3,481   Principal transactions and other income     2       229       ( 6,833 )     ( 6,602 )     -       ( 6,602 ) Total revenues     13,860       2,127       ( 6,833 )     9,154       -       9,154   Compensation     7,825       1,402       216       9,443       2,771       12,214   Other Operating Expense     3,243       584       199       4,026       1,076       5,102   Total operating expenses     11,068       1,986       415       13,469       3,847       17,316   Operating income (loss)     2,792       141       ( 7,248 )     ( 4,315 )     ( 3,847 )     ( 8,162 ) Interest (expense) income     ( 62 )     -       -       ( 62 )     ( 1,044 )     ( 1,106 ) Income (loss) from equity method affiliates     -       -       ( 3,044 )     ( 3,044 )     -       ( 3,044 ) Income (loss) before income taxes     2,730       141       ( 10,292 )     ( 7,421 )     ( 4,891 )     ( 12,312 ) Income tax expense (benefit)     -       -       -       -       ( 60 )     ( 60 ) Net income (loss)     2,730       141       ( 10,292 )     ( 7,421 )     ( 4,831 )     ( 12,252 ) Less: Net income (loss) attributable to the non-convertible non-controlling interest of the Operating LLC     -       -       ( 4,167 )     ( 4,167 )     -       ( 4,167 ) Enterprise net income (loss)     2,730       141       ( 6,125 )     ( 3,254 )     ( 4,831 )     ( 8,085 ) Less: Net income (loss) attributable to the convertible non-controlling interest of Cohen & Company Inc.     -       -       -       -       ( 6,228 )     ( 6,228 ) Net income (loss) attributable to Cohen & Company Inc.   $ 2,730     $ 141     $ ( 6,125 )   $ ( 3,254 )   $ 1,397     $ ( 1,857 )                                                   Other statement of operations data                                                 Depreciation and amortization (included in total operating expense)   $ -     $ 1     $ -     $ 1     $ 142     $ 143     51 Table of Contents   BALANCE SHEET DATA As of June 30, 2023 (Dollars in Thousands)       Capital     Asset     Principal     Segment     Unallocated               Markets     Management     Investing     Total     (1)     Total   Total Assets   $ 764,029     $ 3,919     $ 74,036     $ 841,984     $ 14,142     $ 856,126                                                     Included within total assets:                                                 Investments in equity method affiliates   $ -     $ -     $ 8,782     $ 8,782     $ -     $ 8,782   Goodwill (2)   $ 54     $ 55     $ -     $ 109     $ -     $ 109   Intangible assets (2)   $ 166     $ -     $ -     $ 166     $ -     $ 166     BALANCE SHEET DATA December 31, 2022 (Dollars in Thousands)       Capital     Asset     Principal     Segment     Unallocated               Markets     Management     Investing     Total     (1)     Total   Total Assets   $ 820,238     $ 5,679     $ 36,969     $ 862,886     $ 24,169     $ 887,055                                                     Included within total assets:                                                 Investments in equity method affiliates   $ -     $ -     $ 8,929     $ 8,929     $ -     $ 8,929   Goodwill (2)   $ 54     $ 55     $ -     $ 109     $ -     $ 109   Intangible assets (2)   $ 166     $ -     $ -     $ 166     $ -     $ 166     ( 1 ) Unallocated assets primarily include: (i) amounts due from related parties; (ii) furniture and equipment, net; and (iii) 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 tables above.   Geographic Information   The Company conducts its business activities through offices in the following locations: ( 1 ) United States and ( 2 ) Europe.  Total revenues by geographic area are summarized as follows.   GEOGRAPHIC DATA (Dollars in Thousands)       Three Months Ended June 30,     Six Months Ended June 30,       2023     2022     2023     2022   Total Revenues:                                 United States   $ 21,533     $ 8,278     $ 29,352     $ 6,749   Europe     1,039       876       2,044       1,723   Total   $ 22,572     $ 9,154     $ 31,396     $ 8,472     Long-lived assets attributable to an individual country, other than the United States, are not material.    52 Table of Contents     23 . SUPPLEMENTAL CASH FLOW DISCLOSURE   Interest paid by the Company on its debt and redeemable financial instruments was $ 2,723  and $ 2,437  for the six months ended June 30, 2023 and 2022 , respectively.   The Company paid income taxes of $ 482  and $ 279  for the six months ended June 30, 2023 and 2022 , respectively. The Company received income tax refunds of $ 0 and $0 for the  six months ended June 30, 2023 and 2022 , respectively.   For the six months ended June 30, 2023 , the Company had the following significant non-cash transactions that are not reflected on the statement of cash flows:     ● In conjunction with the consolidation of the SPAC Fund, the Company recorded an increase in receivables from brokers, dealers, and clearing agencies of $ 68,066 , an increase in other investments, at fair value of $ 40,388 , an increase in other assets of $ 63 , an increase in accounts payable of $ 82,711 , and an increase in other investments sold, not yet purchased of $ 25,806 . See note 4.   ●  The Company net received units of membership interest in the Operating LLC.  The Company recognized a net increase in additional paid-in capital of $ 612 , a net decrease in AOCI of $ 13 , and a decrease in non-controlling interest of $ 599 .  See note 17.   ●  The Company received equity shares in a public company in exchange for advisory services.  The fair market value of the shares received was $ 492 .  The Company included this in new issue and advisory revenue in the statement of operations.   ●  The Company recorded a decreases in equity method affiliates of $ 362  and an increase in other investments, at fair value of $ 362  resulting from an in-kind distribution from equity method affiliates.     For the six months ended June 30, 2022 , the Company had the following significant non-cash transactions that are not reflected on the statement of cash flows:     ●  The Company net received units of membership interest in the Operating LLC.  The Company recognized a net decrease in additional paid-in capital of $ 381 , a net increase in AOCI of $ 5 , and an increase in non-controlling interest of $ 376 .  See note 17.   ● 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's election to convert the 2017 Convertible Note into units of membership interest of the Operating LLC.   ●  The Company recorded a decrease of $ 19,357  in equity method affiliates and an increase in other investments, at fair value of $ 19,357  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 decrease in other investment, not sold not purchased of $ 836 resulting from an investment reclass.      53 Table of Contents     24 . RELATED PARTY TRANSACTIONS   Certain terms in this footnote are defined the Company’s Annual Report on Form 10 -K for the year ended December 31, 2022.   The Company has identified the following related party transactions for the six months ended June 30, 2023 and 2022 . 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. 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 Investor entered into the 2022 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 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.   B. 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 2017 Convertible Note into an aggregate of 10,344,827 units of membership interest in the Operating LLC at the conversion rate specified in the 2017 Convertible Note of $ 1.45 per unit. As a result of such conversion, the 2017 Convertible Note was cancelled in its entirety and a $ 15,000 investment in non-convertible controlling interest was recorded. See note 16.   C.  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.     D. Cohen Circle, LLC ("Cohen Circle"), formerly FinTech Masala, LLC   The Company engaged Betsy Cohen, as an agent of Cohen Circle, as a consultant to provide certain services related to Insurance SPAC III. The Company agreed to pay a consultant fee of $ 1 per month, which commenced on December  1, 2020  and continued through December 2022.  In addition, Betsy Cohen made a $ 1  investment in the Insurance SPAC III Sponsor Entities, which was included as a component of non-controlling interest in the consolidated balance sheets.  Insurance SPAC III was liquidated and the consulting fee discontinued effective November 2022.  The expense incurred by the Company for the consulting services provided by Cohen Circle 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 has a sublease agreement as sub-lessor for certain office space with Cohen Circle. The Company received payments under this sublease agreement, which payments are recorded as a reduction in rent and utility expenses. This sublease agreement commenced on August 1, 2018 and has a term that automatically renews for one year periods if not cancelled by either party upon 90 days’ notice prior to the end of the then-existing term. The income earned pursuant to this sublease agreement is included as a reduction in rent expense in the consolidated statements of income and is disclosed in the table below.    54 Table of Contents E. Investment Vehicle and Other      Stoa USA Inc. / FlipOS ("FlipOS")    FlipOS is a related party because Daniel G. Cohen is a member of the board of directors of FlipOS. As of  June 30, 2023 , the Company had made cumulative investments of $ 768  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. The amounts are 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.   Insurance SPAC   III   Insurance SPAC III was considered a related party because it was an equity method investment of the Company.  The Operating LLC was the manager of the Insurance SPAC III Sponsor Entities and the Company consolidated the Insurance SPAC III Sponsor Entities. On November 18, 2022, Insurance SPAC III announced that, because it would not consummate an initial business combination within the time period required, it would dissolve and liquidate, effective as of the close of business on December 22, 2022. Prior to November 18, 2022, Insurance SPAC III Sponsor Entities owned 47.3 % of the equity in Insurance SPAC III Sponsor Entities. Income earned or loss incurred on the equity method investment in the 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 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. IAS III and its affiliates, including the Operating LLC, 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 $ 960  was borrowed by Insurance SPAC III prior to November 18, 2022.   These loans bore no interest and, as the Insurance SPAC III failed to consummate a business combination in the required timeframe, the loans will not  be repaid. The write off of the loans was included in equity method loss in 2022.     SPAC Fund     The SPAC Fund was considered a related party because it was an equity method investment of the Company prior to its consolidation effective April 1, 2023 ( see note 4 ).  The Company had an investment in and a management contract with the SPAC Fund.  Income earned or loss incurred on the investment prior to consolidation is included as part of principal transactions and other income in the tables below.  Revenue earned on the management contract prior to consolidation is included as part of asset management in the tables below.    U.S. Insurance JV     U.S. Insurance JV is considered a related party because it is an equity method investment of the Company. The Company has an investment in and a 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 June 30, 2023 , the Company own ed 1.87 % o f the equity of the U.S. Insurance JV.   CREO JV   CREO JV is considered a related party because it is an equity method investment of the Company. The Company has an investment in and a management contract with CREO JV.  Income earned or loss incurred on the investment are included as part of principal transactions and other in come in the tables below.  As of  June 30, 2023 , the Company owned 7.5 % of th e equity of CREO JV.   55 Table of Contents   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 applicable SPAC.  The Company has had the following transactions with various sponsors of SPACs that are related parties, which the Company does not consolidate.     Fintech Acquisition Corp. V ("FTAC V") was a SPAC.  The sponsor of FTAC V ("FTAC V Sponsor") was a related party as it was 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 would 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, Other SPAC Entities in the tables below.   Fintech Acquisition Corp. VI ("FTAC VI") was a SPAC.  The sponsor of FTAC VI ("FTAC VI Sponsor") was a related party as it is was 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 would 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 Principal transactions and other income, Other SPAC Entities in the tables below.   FTAC Athena Acquisition Corp. ("FTAC Athena") was a SPAC.  The sponsor of FTAC Athena ("FTAC Athena Sponsor") was a related party as it was 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 would 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, Other SPAC Entities in the tables below.   FTAC Hera Acquisition Corp. ("FTAC Hera") was a SPAC.  The sponsor of FTAC Hera ("FTAC Hera Sponsor") was a related party as it was an equity method investment of the Company.  On March 5, 2021, the Operating LLC entered into a letter agreement with FTAC Hera Sponsor whereby the Operating LLC would provide personnel to serve as the chief financial officer as well as other accounting and administrative services to FTAC Hera 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 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, Other SPAC Entities in the tables below.   FTAC Parnassus Acquisition Corp. ("FTAC Parnassus") was a SPAC.  The sponsor of FTAC Parnassus ("FTAC Parnassus Sponsor") was a related party as it was an equity method investment of the Company.  On March 15,  2021, the Operating LLC entered into a letter agreement with FTAC Parnassus Sponsor whereby the Operating LLC would provide personnel to serve as the chief financial officer as well as other accounting and administrative services to FTAC Parnassus 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 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, Other SPAC Entities in the tables below.   FTAC Zeus Acquisition Corp. ("FTAC Zeus") is a SPAC.  The sponsor of FTAC Zeus ("FTAC Zeus Sponsor") is a related party as it is an equity method investment of the Company.  On November 24,  2021, the Operating LLC entered into a letter agreement with FTAC Zeus Sponsor whereby the Operating LLC would provide personnel to serve as the chief financial officer as well as other accounting and administrative services to FTAC Zeus 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 Zeus 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, Other SPAC Entities in the tables below.   FTAC Emerald Acquisition Corp. ("FTAC Emerald") is a SPAC.  The sponsor of FTAC Emerald ("FTAC Emerald Sponsor") is a related party as it is an equity method investment of the Company.  On December 20,  2021, the Operating LLC entered into a letter agreement with FTAC Emerald Sponsor whereby the Operating LLC would provide personnel to serve as the chief financial officer as well as other accounting and administrative services to FTAC Emerald 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 Emerald 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, Other SPAC Entities in the tables below.   As of June 30, 2023, all of the SPACs above other than FTAC Emerald and FTAC Zeus have either liquidated or completed a merger with an operating company.  Subsequent to merger or liquidation of the SPAC, there is no further income or loss recorded on the above transactions.     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  June 30, 2023 , the Company owned 6.87 % of these entities in the aggregate. Income earned or loss incurred on the equity method investments is disclosed in Other SPAC Entities is in the tables below.   56 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     Six Months Ended       June 30, 2023     June 30, 2022     June 30, 2023     June 30, 2022                                     Asset management                                 SPAC Fund   $ -     $ 261     $ 173     $ 543   U.S. Insurance JV     317       269       561       535       $ 317     $ 530     $ 734     $ 1,078   Principal transactions and other income                                 Insurance SPAC III   $ -     $ 60     $ -     $ 120   Stoa USA Inc./FlipOS     -       4,504       -       4,196   Other SPAC Entities     10       35       25       60   SPAC Fund     -       ( 8 )     28       ( 63 ) U.S. Insurance JV     185       ( 190 )     288       ( 110 ) CREO JV     158       37       507       117       $ 353     $ 4,438     $ 848     $ 4,320   Income (loss) from equity method affiliates                                 Dutch Real Estate Entities   $ 69     $ ( 257 )   $ 211     $ ( 265 ) Insurance SPAC III     -       ( 366 )     -       ( 955 ) Other SPAC Entities     ( 580 )     ( 2,421 )     ( 1,117 )     ( 13,928 )     $ ( 511 )   $ ( 3,044 )   $ ( 906 )   $ ( 15,148 )                                   Operating expense (income)                                 Duane Morris   $ 61     $ 153     $ 236     $ 295   Cohen Circle     ( 25 )     ( 22 )     ( 51 )     ( 43 )     $ 36     $ 131     $ 185     $ 252   Interest expense (income)                                 DGC Trust   $ -     $ -     $ -     $ 327   JKD Investor     196       290       514       561       $ 196     $ 290     $ 514     $ 888       The following related party transactions are not included in the tables above.   F.  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 $ 110  and $ 226 for the  three and six months ended June 30, 2023 , respectively. Contributions made on behalf of the Company were $ 103  and $ 204   for the three and six months ended June 30, 2022 , respectively.    The Company leased office space from Zucker and Moore, LLC.  Zucker and Moore, LLC is partially owned by Jack DiMaio, Jr., the vice chairman of the Company’s board of directors.  This lease terminated on June 20, 2022. The Company recorded $ 24 and $ 48 of rent expense related to this office space for the three and six months ended June 30, 2022, respectively.   57 Table of Contents     25 . 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 24  and final settlement of those transactions in cash. All amounts are primarily non-interest bearing.   DUE FROM RELATED PARTIES (Dollars in Thousands)       June 30, 2023     December 31, 2022   U.S. Insurance JV   $ 317     $ 261   SPAC Fund - other receivable     208       294   Employee & other     194       232   Due from related parties   $ 719     $ 787        On February 1, 2023, Daniel G. Cohen, the Company’s executive chairman, in accordance with the Operating LLC operating agreement, redeemed 479,380 LLC Units for which the Company paid to Mr. Cohen an aggregate of $ 420,896 , or $ 0.878 per LLC Unit. The LLC Units were so redeemed by Mr. Cohen in order to fund certain tax liabilities incurred by Mr. Cohen in connection with the vesting, on January 31, 2023, of 967,830 restricted LLC Units that had been previously granted to Mr. Cohen under the 2020 Long-Term Incentive Plan.   On February 1, 2023, Lester Brafman, the Company’s chief executive officer, in accordance with the Operating LLC operating agreement, redeemed 470,330 LLC Units for which the Company paid to Mr. Brafman an aggregate of $ 412,949 , or $ 0.878 per LLC Unit. The LLC Units were so redeemed by Mr. Brafman in order to fund certain tax liabilities incurred by Mr. Brafman in connection with the vesting, on January 31, 2023, of 470,330 restricted LLC Units and 49,750 restricted shares of the Company’s Common Stock, all of which had been previously granted to Mr. Brafman under the 2020 Long-Term Incentive Plan.   58 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, 2022.   “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, unit, per share, and per unit data) except where otherwise noted.   Overview   We are a financial services company specializing in an expanding range of capital markets and asset management services. We are organized into three business segments: Capital Markets, Asset Management, and Principal Investing.     ●  Capital Markets :  Our Capital Markets business segment consists primarily of fixed income sales, trading, gestation repo financing, new issue placements 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 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 ("CCM") is our full-service boutique investment bank, which focuses on M&A, capital markets, and SPAC advisory services.     ●  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 June 30, 2023, we had approximately $2.07 billion in assets under management (“AUM”) of which 50.1% was in CDOs. A significant 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, liquidations, 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 we have made for the purpose of earning an investment return rather than investments to support our 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, riskless trading activities as well as gains and losses (unrealized and realized) and income and expense earned on securities and derivatives classified as trading;   ●  Revenue earned 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; and   ●  Income and loss earned on equity method investments.   59 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 origination 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, CCM is our full-service boutique investment bank, which focuses on M&A, capital markets, and SPAC advisory services.  Currently, our primary source of new issue and advisory revenue is from originating assets for our U.S. and European insurance asset management business including our U.S. Insurance JV and CREO JV, as well as from investment banking and advisory services through CCM.   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 June 30, 2023, 50.1% 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 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, liquidations, 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, SFA transactions, 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 notes 7 and 9 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.    60 Table of Contents   The SPAC Market   Beginning in 2018, we began sponsoring a series of SPACs.  Each sponsored SPAC either completed or was seeking to complete a business combination with a company 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. Effective April 1, 2023, all of the investors in the SPAC Fund, other than the GP of the SPAC Fund, redeemed all of their interests in the SPAC Fund.  See recent events below for discussion of our consolidation of the SPAC Fund.    As a complement to the SPAC Fund, we established and became manager of two newly formed umbrella limited liability companies (the “SPAC Series Funds”) that 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 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 2022 and the six months ended June 30, 2023 in certain SPAC related investments.  Continued declines in the equity prices of these companies will result in further losses for us.     Margin Pressures in Fixed Income Brokerage Business   Performance in the financial services industry in which we operate is highly correlated to the overall strength of the economy and financial market activity. 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; (iv) building out CCM and (v) 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.   Rising Interest Rates and Inflation   During 2022, the U.S. Federal Reserve began a process of raising the federal funds rate and quantitative tightening to address rising inflation.  These actions have the effect of increasing interest rates, which negatively impacts our business in several ways:    1.  Rising rates reduce the fair value of fixed income securities that we hold on our balance sheet. 2. Rising rates have created instability in the equity markets, which has reduced equity financing and business combination volumes and negatively impacted CCM. 3.  Rising rates have reduced the volumes of new issue fixed income instruments, which has negatively impacted our CREO JV.  4.  Rising rates significantly reduce mortgage activity.  Our mortgage group's profitability is mainly impacted by the volume of mortgage activity in the U.S. (both mortgages for new home purchases as well as refinancing).  Furthermore, our mortgage group engages in repo lending to mortgage originators.  Reduced mortgage volumes impose financial pressures on mortgage originators and may increase the risk that originators default on their repo obligations to us.  See note 10 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q. 5.  Rising rates may ultimately push the U.S. into recession, which may further reduce overall transaction volumes in the financial markets negatively impacting our business generally.     61 Table of Contents   Recent Events   Consolidation of the SPAC Fund   Prior to March 31, 2023, the general partner of the SPAC Fund (“GP of the SPAC Fund”) had an investment in the SPAC Fund and the potential to earn incentive fees and did not consolidate the SPAC Fund.  We own an interest in and consolidate the GP of the SPAC Fund.  Effective April 1, 2023, all of the investors in the SPAC Fund, other than the GP of the SPAC Fund, redeemed all of their interests in the SPAC Fund.  Therefore, effective April 1, 2023, the GP of the SPAC Fund became the sole owner of the SPAC Fund and began consolidating it. Because we consolidate the GP of the SPAC Fund, we began consolidating the SPAC Fund effective April 1, 2023 as well. The following table represent the assets and liabilities of the SPAC Fund upon consolidation by us:       Asset/(Liability)   Cash and cash equivalents   $ 257   Receivables from brokers, dealers, and clearing agencies     68,066   Other investments, at fair value     40,388   Other assets     108   Accounts payable and other liabilities     (82,968 ) Other investments sold, not yet purchased     (25,806 ) GP's remaining investment in SPAC Fund   $ 45     Included in accounts payable and other liabilities were amounts due to the redeeming investors in the SPAC Fund. As of June 30, 2023, $371 of redemptions remained outstanding to be paid and were included as a component of accounts payable and other liabilities in the Company’s balance sheet.  All of the remaining redemption amounts were paid in July 2023.   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 LLC Units 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 LLC Units have the same conversion and redemption rights as the existing convertible non-controlling interest units.  See note 20 to the Company's December 31, 2022 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 24 to our consolidated financial statements included Item 1 of this Quarterly Report on Form 10-Q.   The 2020 Senior Note s   On January 31, 2020, the Operating LLC entered into a note purchase agreement (the “Original Purchase Agreement”) with the 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.    On January 31, 2022, the Operating LLC and JKD Investor entered into a note purchase agreement (the "2022 Purchase Agreement"), pursuant to which, among other things,  (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 the 2020 Senior Notes held by RNCS. See notes 16 and 24 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.   62 Table of Contents   INSU   Acquisition Corp   III ("Insurance SPAC III")   The Operating LLC was 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 were 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 ("IPO").   Each Insurance SPAC III Unit consisted 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 entitled 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.  If Insurance SPAC III failed to consummate a business combination within the first 24 months following the IPO, its corporate existence would cease except for the purposes of winding up its affairs and liquidating its assets.   The Operating LLC loaned to Insurance SPAC III approximately $71 to cover its IPO expenses, which amount was repaid in full at the closing of the IPO. IAS III and its affiliates, including the Operating LLC, committed to loan Insurance SPAC III up to an additional $1,500 to cover operating and acquisition related expenses following the IPO, of which $960 was borrowed by Insurance SPAC III. See note 24. The loans bore no interest, and if the Insurance SPAC III consummated a business combination in the required time period, the loans were to be repaid from the funds held in Insurance SPAC III’s trust account. Pursuant to its governing documents, if Insurance SPAC III did not consummate a business combination in the required time frame, no funds from Insurance SPAC III's trust account could be used to repay the loans.   On November 18, 2022, Insurance SPAC III announced it would not consummate an initial business combination within the required time period and that it intended to dissolve and liquidate, effective as of the close of business on December 22, 2022, and redeem all of the Insurance SPAC III Common Stock and each Insurance SPAC III Warrant that were included in its IPO, at a per-share redemption price of approximately $10.09. As of the close of business on December 22, 2022, the Insurance SPAC III Common Stock and each Insurance SPAC III Warrant were deemed cancelled and represented only the right to receive the redemption amount of $10.09 per share.   In order to provide for the disbursement of funds from the trust account, Insurance SPAC III instructed the trustee of the trust account to take all necessary actions to liquidate the securities held in the trust account. The proceeds of the trust account were held in a non-interest bearing account while awaiting disbursement to the holders of the public shares. Record holders received their pro rata portion of the proceeds of the trust account, less $100 of interest to pay dissolution expenses and net of taxes payable. Insurance SPAC III Sponsor Entities agreed to waive their redemption rights with respect to their outstanding shares of Class B common stock issued prior to the Insurance SPAC III IPO. There will be no redemption rights or liquidating distributions with respect to each Insurance SPAC III Warrant, which expired and were rendered worthless. As a result of the liquidation of Insurance SPAC III, we recorded an equity method loss of $5,896 for the year ended December 31, 2022, which included a write-off of the amounts advanced to Insurance SPAC III from the Operating LLC as well as amounts invested. Of this loss, $4,808 was allocated to the non-convertible non-controlling interests. Therefore, the net impact to the Operating LLC was $1,088.    63 Table of Contents   Consolidated Results of Operations   The following section provides a comparative discussion of our consolidated results of operations for the specified periods. The period-to-period comparisons of financial results are not necessarily indicative of future results.     Six Months Ended June 30, 2023 Compared to the Six Months Ended June 30, 2022   The following table sets forth information regarding our consolidated results of operations for the six months ended June 30, 2023 and 2022.     COHEN & COMPANY INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in Thousands) (Unaudited)          Six Months Ended June 30,     Favorable / (Unfavorable)       2023     2022     $ Change     % Change   Revenues                                 Net trading   $ 15,626     $ 22,399     $ (6,773 )     (30 %) Asset management     3,630       3,787       (157 )     (4 %) New issue and advisory     2,295       7,251       (4,956 )     (68 %) Principal transactions and other income (loss)     9,845       (24,965 )     34,810       139 % Total revenues     31,396       8,472       22,924       271 %                                   Operating expenses                                 Compensation and benefits     20,538       26,093       5,555       21 % Business development, occupancy, equipment     2,619       2,543       (76 )     (3 %) Subscriptions, clearing, and execution     4,468       3,913       (555 )     (14 %) Professional fee and other operating     3,962       3,688       (274 )     (7 %) Depreciation and amortization     293       275       (18 )     (7 %) Total operating expenses     31,880       36,512       4,632       13 %                                   Operating income / (loss)     (484 )     (28,040 )     27,556       98 %                                   Non-operating income / (expense)                                                                   Interest expense, net     (3,222 )     (2,457 )     (765 )     (31 %) Income / (loss) from equity method affiliates     (906 )     (15,148 )     14,242       94 % Income / (loss) before income taxes     (4,612 )     (45,645 )     41,033       90 % Income tax expense / (benefit)     6,134       1,773       (4,361 )     (246 %) Net income / (loss)     (10,746 )     (47,418 )     36,672       77 % Less: Net income (loss) attributable to the non-convertible non-controlling interest     6,600       (18,871 )     (25,471 )     (135 %) Enterprise net income / (loss)     (17,346 )     (28,547 )     11,201       39 % Less: Net income (loss) attributable to the convertible non-controlling interest     (8,108 )     (19,078 )     (10,970 )     (58 %) Net income / (loss) attributable to Cohen & Company Inc.   $ (9,238 )   $ (9,469 )     231       2 %   Revenues   Revenues increased by $22,924, or 271%, to $31,396 for the six months ended June 30, 2023, as compared to $8,472 for the six months ended June 30, 2022. As discussed in more detail below, the change was comprised of (i) a decrease of $6,773 in net trading revenue; (ii) a decrease of $157 in asset management revenue; (iii) a decrease in new issue and advisory of $4,956; and (iv) an increase of $34,810 in principal transactions and other income.   64 Table of Contents   Net Trading   Net trading revenue decreased by $6,773, or 30%, to $15,626 for the six months ended June 30, 2023, as compared to $22,399 for the six months ended June 30, 2022.  The following table shows the detail by trading group.   NET TRADING (Dollars in Thousands)       Six Months Ended June 30,       2023     2022     Change   Mortgage   $ (785 )   $ 3,326     $ (4,111 ) Matched book repo     8,396       17,634       (9,238 ) High yield corporate     2,530       2,139       391   Investment grade corporate     275       869       (594 ) Wholesale and other     5,210       (1,569 )     6,779   Total   $ 15,626     $ 22,399     $ (6,773 )   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 outside of our control.  This may adversely affect the ultimate value realized from these investments. In addition, our net trading revenue 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, generally, 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 Item 1 of 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 we will ultimately sell these assets.  We consider our matched book repo business to be subject to significant concentration risk.  See note 10 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.   A loss of $1,478 related to the FGMC bankruptcy is included above in the mortgage group during the six months ended June 30, 2023.  See note 10 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.     65 Table of Contents   Asset Management   Our AUM equals the sum of the NAV or gross assets of the Investment Vehicles we manage based on whichever measurement serves as the basis for the calculation of our management fees.    Our calculation of AUM may differ from the calculations used by other asset managers and, as a result, this measure may not be comparable to similar measures presented by other asset managers.  This definition of AUM is not necessarily identical to the definitions of AUM that may be used in our management agreements.       As of June 30,     As of December 31,       2023     2022     2022     2021   Company-sponsored CDOs   $ 1,034,934     $ 1,167,484     $ 1,053,430     $ 1,239,988   Other Investment Vehicles (1)     1,030,763       1,041,960       1,062,897       1,118,162   Assets under management (2)   $ 2,065,697     $ 2,209,444     $ 2,116,327     $ 2,358,150     (1) Other Investment Vehicles include any Investment Vehicle that is not a Company-sponsored CDO. (2) In some cases, accounts we manage may employ leverage.  Further, in some cases, our fees are based on gross assets and in other cases, our fees are based on net assets.  Finally, in the case of 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 $157, or 4%, to $3,630 for the six months ended June 30, 2023, as compared to $3,787 for the six months ended June 30, 2022, as discussed in more detail below. The following table provides a more detailed comparison of the two periods.   ASSET MANAGEMENT  (Dollars in Thousands)       Six Months Ended June 30,       2023     2022     Change   CDOs   $ 826     $ 986     $ (160 ) Other     2,804       2,801       3   Total   $ 3,630     $ 3,787     $ (157 )   Asset management fees from CDOs decreased mainly due to paydowns of principal and the successful auction of one of our Alesco CDOs in 2022.  Asset management fees from other remained relatively unchanged.     66 Table of Contents   New Issue and Advisory   New issue and advisory revenue decreased by $4,956, or 68%, to $2,295 for the six months ended June 30, 2023, as compared to $7,251 for the six months ended June 30, 2022.  The following table summarizes new issue revenue by business line.        For the Six Months Ended       2023     2022     Change   Cohen & Company Capital Markets   $ 1,612     $ 3,505     $ (1,893 ) Commercial Real Estate Originations     8       1,753       (1,745 ) U.S. Insurance Originations     675       1,993       (1,318 ) Total   $ 2,295     $ 7,251     $ (4,956 )   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.    CCM, a division of JVB, is our full-service boutique investment bank, which focuses on M&A, capital markets, and SPAC advisory services.  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.    67 Table of Contents   Principal Transactions and Other Income (Loss)   Principal transactions and other income (loss) increased by $34,810 to $9,845 for the six months ended June 30, 2023, as compared to ($24,965) for the six months ended June 30, 2022.  The following table summarizes principal transactions and other income by category.   PRINCIPAL TRANSACTIONS & OTHER INCOME (Dollars in Thousands)       Six Months Ended June 30,       2023     2022     Change   SFT   $ 121     $ (4,678 )   $ 4,799   LMND     104       (3,143 )     3,247   WEJO     (151 )     (1,617 )     1,466   REE     (6 )     (4,173 )     4,167   RBT     (2,964 )     -       (2,964 ) HLGN     (229 )     (14,022 )     13,793   PAYO     (199 )     (972 )     773   PWP     (50 )     (511 )     461   BURU     (458 )     -       (458 ) SPAC Fund     12       (63 )     75   Share forward agreements     9,419       -       9,419   Bridge loan exit fee     3,040       -       3,040   U.S. Insurance JV     288       (110 )     398   CREO JV     507       116       391   Stoa USA Inc./ FlipOS     -       4,196       (4,196 ) Other     (343 )     (517 )     174   Total principal transactions     9,091       (25,494 )     34,585                             IIFC revenue share     497       343       154   All other income / (loss)     257       186       71   Other income     754       529       225                             Principal transactions and other income (loss)   $ 9,845     $ (24,965 )   $ 34,810     Principal Transactions     In connection with the investments discussed below, see note 8 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q for information regarding how we determine the value of such investments. For several of the investments described below, we also had an investment in the same company that was accounted for under the equity method during the periods presented. See discussion of equity method income / (loss) below.   SFT represents equity positions in Shift Technologies, Inc. (NASDAQ: SFT), a publicly traded company that closed a business combination with Insurance SPAC.  As of June 30, 2023, we had total investment in SFT carried at fair value of $367, which was included as a component of other investments, at fair value.     LMND represents equity positions in Lemonade, Inc. (NASDAQ: LMND), a publicly traded company that acquired Metromile, Inc. ("MILE"), which closed a business combination with Insurance SPAC II.  As of June 30, 2023, we had total investment in LMND carried at fair value of $185, which was included as a component of other investments, at fair value.     WEJO represents equity positions of Wejo Group Ltd. (NASDAQ: WEJO), a publicly traded company that closed a business combination with Virtuoso Acquisition Corp. As of June 30, 2023, we had total investment in WEJO carried at fair value of $6, which was included as a component of other investments, at fair value.     REE represents equity positions of REE Automotive Ltd. (NASDAQ: REE), a publicly traded company that closed a business combination with 10X Capital Venture Acquisition Corp. As of June 30, 2023, we had a total investment in REE carried at fair value of $285, which was included as a component of other investments, at fair value.     RBT represents equity positions of Rubicon Technologies, Inc. (NYSE: RBT), a publicly traded company that closed a business combination with Founder SPAC. As of June 30, 2023, we had a total investment in RBT carried at fair value of $79, which was included as a component of other investments, at fair value.   HLGN represents equity positions of Heliogen, Inc. (NYSE: HLGN), a publicly traded company that closed a business combination with Athena Technology Acquisition Corp.  As of June 30, 2023, we had a total investment in HLGN carried at fair value of $124, which was included as a component of other investments, at fair value.     PAYO represents equity positions of Payoneer Global, Inc. (NASDAQ: PAYO), a publicly traded company that closed a business combination with FTAC Olympus Acquisition Corp.  As of June 30, 2023, we had a total investment in PAYO carried at fair value of $1,340, which was included as a component of other investments, at fair value.   68 Table of Contents   PWP represents equity positions of Perella Weinberg Partners (NASDAQ: PWP), a publicly traded company that closed a business combination with FTAC IV Acquisition Corp.  As of June 30, 2023, we had a total investment in PWP carried at fair value of $179, which was included as a component of other investments, at fair value.     BURU represents equity positions of Noburu, Inc. (NASDAQ: BURU), a publicly traded company that closed a business combination with Tailwind Acquisition Corp.  As of June 30, 2023, we had total investments in BURU carried at fair value of $34, which were included as a component of other investments, at fair value.    The SPAC Fund invested in the equity of SPACs. We carried our investment in the SPAC Fund at its reported NAV.  Effective April 1, 2023, we began consolidating the SPAC Fund (see note 4 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q).  For 2023, the amount shown above represents the change in fair value during the period prior to consolidation.   We have engaged in several transactions known as share forward arrangements ("SFAs"). In a typical SFA transaction, we acquire an interest in a publicly traded company and enter into an offsetting derivative with the same company.  Both the interest in the public company and the offsetting derivative are carried at fair value.  The amount shown in the table above represents the net change in fair value recorded during the period.  The interests we hold in SFA counterparties are included as a component of other investments, at fair value.  The derivatives are included as a component of other investments sold, not yet purchased, at fair value.  See note 9 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q for more information.    In 2022, we entered into a bridge loan arrangement with an early stage growth company.  The principal of the bridge loan was repaid in full during the three months ended June 30, 2023.  We earned a gross exit fee of $3,150 in connection with the maturity of this bridge loan.  This exit fee receivable was carried at its fair value of $3,040 as of June 30, 2023.  $1,050 of the exit fee receivable was paid in July 2023.  The exact timing and manner of repayment of the remaining exit fee receivable depends upon a planned upcoming merger of the early stage growth company.  We will carry the exit fee receivable at fair value as a component of our other investments, at fair value until repaid.     The U.S. Insurance JV invests in insurance company debt.  We carry our investment in the U.S. Insurance JV at its reported NAV.  As of June 30, 2023, we had a total investment in the U.S. Insurance JV carried at fair value of $3,073, which was included as a component of other investments, at fair value.    The CREO JV invests in commercial real estate debt.  We carry our investment in the CREO JV at its reported NAV.  As of June 30, 2023, we had a total investment in the CREO JV carried at fair value of $5,474, which was included as a component of other investments, at fair value.    Stoa USA Inc. / FlipOS is a private company in which we own common equity. As of June 30, 2023, we had a total investment in Stoa USA Inc. / FlipOS carried at fair value of $6,770, which was included as a component of other investments, at fair value. See note 24 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.    Other principal investments consist of realized and unrealized gains and losses from other investments reported at fair value.    Other Income (Loss)   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 $5,010.  Also, in any particular year, the IIFC revenue share earned by us cannot exceed $2,000.    69 Table of Contents   Operating Expenses   Operating expenses decreased by $4,632, or 13%, to $31,880 for the six months ended June 30, 2023, as compared to $36,512 for the six months ended June 30, 2022. As discussed in more detail below, the change was comprised of (i) a decrease of $5,555 in compensation and benefits; (ii) an increase of $76 in business development, occupancy, and equipment; (iii) an increase of $555 in subscriptions, clearing, and execution; (iv) an increase of $274 in professional fee and other operating; and (v) an increase of $18 in depreciation and amortization.   Compensation and Benefits   Compensation and benefits decreased by $5,555, or 21%, to $20,538 for the six months ended June 30, 2023, as compared to $26,093 for the six months ended June 30, 2022.   COMPENSATION AND BENEFITS (Dollars in Thousands)       Six Months Ended June 30,       2023     2022     Change   Cash compensation and benefits   $ 18,342     $ 23,907     $ (5,565 ) Equity-based compensation     2,196       2,186       10   Total   $ 20,538     $ 26,093     $ (5,555 )   Cash compensation and benefits in the table above was primarily comprised of salary, incentive compensation, severance, employer portion of payroll taxes, and benefits.  Cash compensation and benefits decreased by $5,565 to $18,342 for the six months ended June 30, 2023, as compared to $23,907 for the six months ended June 30, 2022.  The decrease was due to a decrease in incentive compensation related to revenues, partially offset by increases related to the continued build out of the CCM team.  Our total headcount decreased from 121 at June 30, 2022 to 117 at June 30, 2023.     Equity-based compensation increased by $10 to $2,196 for the six months ended June 30, 2023, as compared to $2,186 for the six months ended June 30, 2022.     Business Development, Occupancy, and Equipment   Business development, occupancy, and equipment increased by $76 to $2,619 for the six months ended  June 30, 2023 , as compared to $2,543  for the six months ended June 30, 2022 .  This increase was comprised of an increase in occupancy and equipment of $127, partially offset by a decrease in business development of $51.     Subscriptions, Clearing, and Execution     Subscriptions, clearing, and execution increased by $555 to $4,468  for the six months ended  June 30, 2023 , as compared to $3,913  for the six months ended June 30, 2022 . This increase was comprised of an increase in subscriptions and dues of $259 and an increase in clearing and execution of $296.    Professional Fee and Other Operating Expenses   Professional fee and other operating expenses increased by $274 to $3,962  for the six months ended  June 30, 2023 , as compared to $3,688  for the six months ended June 30, 2022 . This increase was comprised of an increase in professional fees of $260 and an increase in other operating expense of $14.     Depreciation and Amortization   Depreciation and amortization increased by $18 to $293 for the six months ended June 30, 2023, as compared to $275 for the six months ended June 30, 2022.    70 Table of Contents   Non-Operating Income and Expense   Interest Expense, net     Interest expense, net increased by $765 to $3,222 for the six months ended June 30, 2023, as compared to $2,457 for the six months ended June 30, 2022.     INTEREST EXPENSE (Dollars in Thousands)       Six Months Ended June 30,       2023     2022     Change   Junior subordinated notes   $ 2,485     $ 1,413     $ 1,072   2020 Senior Notes     223       231       (8 ) 2017 Convertible Note     -       327       (327 ) Byline Bank     223       134       89   Redeemable Financial Instrument - JKD Capital Partners I LTD     291       352       (61 )     $ 3,222     $ 2,457     $ 765     See notes 15 and 16 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.     71 Table of Contents   Income / (Loss) from Equity Method Affiliates     Income / (loss) from equity method affiliates increased by $14,242 to ($906) for the six months ended June 30, 2023, as compared to ($15,148) for the six months ended June 30, 2022.  See note 11 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.        Six Months Ended June 30,       2023     2022     Change   Insurance SPACs   $ -     $ (957 )   $ 957   Dutch Real Estate Entities     212       (264 )     476   SPAC Sponsor Entities and Other     (1,118 )     (13,927 )     12,809   Total   $ (906 )   $ (15,148 )   $ 14,242     SPAC Sponsor Entities includes both indirect and direct investments in SPAC Sponsor Entities.  Several of these SPAC Sponsor Entities are invested in SPACs that have completed their business combinations.  Those SPAC Sponsor Entities hold restricted and unrestricted equity interests in the public post-merger entities.  We account for our investments in SPAC Sponsor Entities under the equity method of accounting.  If the SPAC Sponsor Entity distributes SPAC shares to us, we account for those SPAC shares as a component of other investments, at fair value.  The following table shows the equity method income / (loss) included in SPAC Sponsor Entities and Other above broken out by the ultimate public company investee.  For several of the investments described below, we also had an investment in the same company accounted for at fair value as a component of other investments, at fair value during the periods presented. See discussion of principal transactions above.       Six Months Ended June 30,       2023     2022     Change   HLGN   $ -     $ (10,626 )   $ 10,626   WEJO     -       (2,128 )     2,128   DRTS     (50 )     1,075       (1,125 ) Other     (1,068 )     (2,248 )     1,180   Total   $ (1,118 )   $ (13,927 )   $ 12,809     As of June 30, 2023, our equity method investment in the sponsor entity of the predecessor SPAC of HLGN was $0.  However, during the periods presented, we held HLGN shares as a component of other investments, at fair value as of June 30, 2023.  See  Principal Transactions  above and note 8 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.   As of June 30, 2023, our equity method investment in the sponsor entity of the predecessor SPAC of WEJO was $0.  However, during the periods presented, we held WEJO shares as a component of other investments, at fair value as of June 30, 2023.  See  Principal Transactions  above and note 8 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.   As of June 30, 2023, our equity method investment in the sponsor entity of the predecessor SPAC of DRTS was $0.  However, during the periods presented, we held DRTS shares as a component of other investments, at fair value as of June 30, 2023.  See  Principal Transactions  above and note 8 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.   The remaining investments in SPAC Sponsor Entities and Other represent investments in sponsor entities that have not yet completed a business combination and other equity method investments.  See note 11 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q   72 Table of Contents   Income Tax Expense / (Benefit)    Income tax expense / (benefit) increased by $4,361 to $6,134 for the six months ended June 30, 2023, as compared to $1,773 for the six months ended June 30, 2022.         For the Six Months Ended June 30,       2023     2022     Change   Current   $ (469 )   $ 411     $ 880   Deferred     6,603       1,362       (5,241 ) Total   $ 6,134     $ 1,773     $ (4,361 )   Of the $6,134 of income tax expense recognized during the six months ended June 30, 2023, $5,644 represented deferred income tax expense recorded as a result of an increase in the valuation allowance recorded against our carryforward assets (net operating loss, "NOL," and net capital loss, "NCL").  Currently, we expect to have federal NOL carryforwards of $98,819, federal NCL carryforwards of $59,729, as well as significant state NOL carryforwards in several states and cities where we do business, as of December 31, 2023.  According to ASC 740  Income Taxes, we should record an offsetting valuation allowance against these deferred tax assets in an amount such that the net asset recognized represents amounts that we believe are more likely than not to be realized.  In making this determination, we must estimate the future amounts of taxable income we will generate in each taxing jurisdiction.  We then must consider the remaining statutory time period available for each carryforward asset, as well as other statutory limitations on usage such as annual limits and income type limits (capital vs. ordinary).  Due to significant losses incurred recently as well as the overall market conditions that we face generally, in the quarter ended June 30, 2023, we revised downward the amount of carryforward assets we believe will be realizable in the future above a more likely than not standard.  Accordingly, we increased the valuation allowances that we had recorded in the quarter ended June 30, 2023, resulting in $5,644 of additional deferred tax expense.     Our provision for income taxes fluctuates due to several factors mostly attributable to our legal structure, which are summarized as follows.   Cohen & Company Inc. is treated as a C corporation for United States federal income tax purposes. A U.S. C corporation is subject to a federal tax rate of 21%.  The Company's effective tax rate is significantly different than this rate for the following reasons:   1.  Cohen & Company Inc. consolidates the Operating LLC but only owns a minority economic interest in the Operating LLC.  For the six months ended June 30, 2023, Cohen & Company Inc. owned 27.31% of the economic interests of the Operating LLC (on average) and was allocated the same percentage of income/(loss) generated by the Operating LLC.  To the extent Cohen & Company Inc. incurs tax obligations on this, the related tax expense is recognized in these consolidated financial statements.  The remaining 72.69% that was allocated to the non-controlling members of the Operating LLC is subject to taxation on the members' tax returns.     2. The Operating LLC itself consolidates certain pass-through entities.  Therefore, the income/(loss) of these entities is included in the Company's consolidated results, but no tax expense/(benefit) related to the unowned portions is included.     3.  There are state, local, and foreign taxes to which the Operating LLC or its subsidiaries are subject to, which are included in the effective tax rate.     4.  We also have 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 periods.     73 Table of Contents   Net Income / (Loss) Attributable to the Non-Convertible Non-Controlling Interest   Net income / (loss) attributable to the non-convertible non-controlling interest for the six months ended June 30, 2023 and 2022 was comprised of the non-controlling interest related to member interests in consolidated subsidiaries of the Operating LLC other than interests held by us therein for the relevant periods.  These interests are not convertible into Common Stock.     SUMMARY CALCULATION OF NON-CONVERTIBLE NON-CONTROLLING INTEREST For the Six Months Ended June 30, 2023       Six Months Ended June 30,       2023     2022     Change   Insurance III SPAC Sponsor Entities   $ -     $ (483 )   $ (483 ) SPAC PIPE Entities     -       (2,270 )     (2,270 ) Other SPAC Sponsor Investor     (29 )     (16,118 )     (16,089 ) GP of SPAC Fund     6,629       -       (6,629 ) Total   $ 6,600     $ (18,871 )   $ (25,471 )   Insurance SPAC III Sponsor Entities are the sponsor entities formed by us for Insurance SPAC III.  SPAC PIPE Entities are entities that invest in private investment in public equity ("PIPEs") of post business combination SPACs.  Other SPAC Sponsor Investor represents an entity that we consolidate, but do not wholly own, that invests in other SPAC sponsor entities.  The GP of the SPAC Fund is consolidated by us, but we do not wholly own it.     Net Income / (Loss) Attributable to the Convertible Non-Controlling Interest   Net income / (loss) attributable to the convertible non-controlling interest for the six months ended June 30, 2023 and 2022 was comprised of the non-controlling interest related to member interests in the Operating LLC other than interests held by us therein 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, 2022.     SUMMARY CALCULATION OF CONVERTIBLE NON-CONTROLLING INTEREST For the Six Months Ended June 30, 2023       Total Operating LLC     Cohen &               Consolidated     Company Inc.     Consolidated   Net income / (loss) before tax   $ (4,612 )   $ -     $ (4,612 ) Income tax expense / (benefit)     (58 )     6,192       6,134   Net income / (loss) after tax     (4,554 )     (6,192 )     (10,746 ) Other consolidated subsidiary non-controlling interest     6,600                   Net income / (loss) attributable to the Operating LLC     (11,154 )                 Average effective Operating LLC non-controlling interest % (1)     72.69 %                 Convertible non-controlling interest   $ (8,108 )                   SUMMARY CALCULATION OF NON-CONTROLLING INTEREST For the Six Months Ended June 30, 2022       Total Operating LLC     Cohen &               Consolidated     Company Inc.     Consolidated   Net income / (loss) before tax   $ (45,645 )   $ -     $ (45,645 ) Income tax expense / (benefit)     (11 )     1,784       1,773   Net income / (loss) after tax     (45,634 )     (1,784 )     (47,418 ) Other consolidated subsidiary non-controlling interest     (18,871 )                 Net income / (loss) attributable to the Operating LLC     (26,763 )                 Average effective Operating LLC non-controlling interest % (1)     71.28 %                 Operating LLC non-controlling interest   $ (19,078 )                       (1) Non-controlling interest is recorded on a quarterly basis. 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.  74 Table of Contents     Three Months Ended June 30, 2023 Compared to the Three Months Ended June 30, 2022   The following table sets forth information regarding our consolidated results of operations for the three months ended June 30, 2023 and 2022.     COHEN & COMPANY INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in Thousands) (Unaudited)         Three Months Ended June 30,     Favorable / (Unfavorable)       2023     2022     $ Change     % Change   Revenues                                 Net trading   $ 7,416     $ 10,377     $ (2,961 )     (29 %) Asset management     1,605       1,898       (293 )     (15 %) New issue and advisory     1,395       3,481       (2,086 )     (60 %) Principal transactions and other income (loss)     12,156       (6,602 )     18,758       284 % Total revenues     22,572       9,154       13,418       147 %                                   Operating expenses                                 Compensation and benefits     10,001       12,214       2,213       18 % Business development, occupancy, equipment     1,318       1,295       (23 )     (2 %) Subscriptions, clearing, and execution     2,343       1,972       (371 )     (19 %) Professional fee and other operating     1,762       1,692       (70 )     (4 %) Depreciation and amortization     149       143       (6 )     (4 %) Total operating expenses     15,573       17,316       1,743       10 %                                   Operating income / (loss)     6,999       (8,162 )     15,161       186 %                                   Non-operating income / (expense)                                                                   Interest expense, net     (1,630 )     (1,106 )     (524 )     (47 %) Income / (loss) from equity method affiliates     (511 )     (3,044 )     2,533       83 % Income / (loss) before income taxes     4,858       (12,312 )     17,170       139 % Income tax expense / (benefit)     5,550       (60 )     (5,610 )     (9,350 %) Net income / (loss)     (692 )     (12,252 )     11,560       94 % Less: Net income (loss) attributable to the non-convertible non-controlling interest     6,503       (4,167 )     (10,670 )     (256 %) Enterprise net income / (loss)     (7,195 )     (8,085 )     890       11 % Less: Net income (loss) attributable to the convertible non-controlling interest     (594 )     (6,228 )     (5,634 )     (90 %) Net income / (loss) attributable to Cohen & Company Inc.   $ (6,601 )   $ (1,857 )     (4,744 )     (255 %)   Revenues   Revenues increased by $13,418, or 147%, to $22,572 for the three months ended June 30, 2023, as compared to $9,154 for the three months ended June 30, 2022. As discussed in more detail below, the change was comprised of (i) a decrease of $2,961 in net trading revenue; (ii) a decrease of $293 in asset management revenue; (iii) a decrease in new issue and advisory of $2,086; and (iv) an increase of $18,758 in principal transactions and other income.   75 Table of Contents   Net Trading   Net trading revenue decreased by $2,961, or 29%, to $7,416 for the three months ended June 30, 2023, as compared to $10,377 for the three months ended June 30, 2022.  The following table shows the detail by trading group.   NET TRADING (Dollars in Thousands)       Three Months Ended June 30,       2023     2022     Change   Mortgage   $ 201     $ 1,748     $ (1,547 ) Matched book repo     4,016       7,862       (3,846 ) High yield corporate     1,046       1,163       (117 ) Investment grade corporate     68       438       (370 ) Wholesale and other     2,085       (834 )     2,919   Total   $ 7,416     $ 10,377     $ (2,961 )   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 under 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 Item 1 of 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 Item 1 of this Quarterly Report on Form 10-Q.   A loss of $313 related to the FGMC bankruptcy is included above in the mortgage group during the three months ended June 30, 2023.  See note 10 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.     76 Table of Contents   Asset Management   Our AUM equals the sum of the NAV or gross assets of the Investment Vehicles we manage based on whichever measurement serves as the basis for the calculation of our management fees.    Our calculation of AUM may differ from the calculations used by other asset managers and, as a result, this measure may not be comparable to similar measures presented by other asset managers.  This definition of AUM is not necessarily identical to the definitions of AUM that may be used in our management agreements.       As of June 30,     As of December 31,       2023     2022     2022     2021   Company-sponsored CDOs   $ 1,034,934     $ 1,167,484     $ 1,053,430     $ 1,239,988   Other Investment Vehicles (1)     1,030,763       1,041,960       1,062,897       1,118,162   Assets under management (2)   $ 2,065,697     $ 2,209,444     $ 2,116,327     $ 2,358,150     (1) Other Investment Vehicles include any Investment Vehicle that is not a Company-sponsored CDO. (2) In some cases, accounts we manage may employ leverage.  Further, in some cases, our fees are based on gross assets and in other cases, our fees are based on net assets.  Finally, in the case of 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 $293, or 15%, to $1,605 for the three months ended June 30, 2023, as compared to $1,898 for the three months ended June 30, 2022, 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 June 30,       2023     2022     Change   CDOs   $ 409     $ 492     $ (83 ) Other     1,196       1,406       (210 ) Total   $ 1,605     $ 1,898     $ (293 )   Asset management fees from CDOs decreased mainly due to paydowns of principal and the successful auction of one of our Alesco CDOs in 2022.  Asset management fees from other decreased due to a decrease in fees earned from the SPAC Fund due to the consolidation of the SPAC Fund effective April 1, 2023.  See note 4 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.     77 Table of Contents   New Issue and Advisory   New issue and advisory revenue decreased by $2,086 to $1,395 for the three months ended June 30, 2023, as compared to $3,481 for the three months ended June 30, 2022.  The following table summarizes new issue and advisory revenue by business line.        Three Months Ended June 30,       2023     2022     Change   Cohen & Company Capital Markets   $ 870     $ 1,972     $ (1,102 ) Commercial Real Estate Originations     -       716       (716 ) U.S. Insurance Originations     525       793       (268 ) Total   $ 1,395     $ 3,481     $ (2,086 )   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.    CCM, a division of JVB, is our full-service boutique investment bank, which focuses on M&A, capital markets, and SPAC advisory services.  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.    78 Table of Contents   Principal Transactions and Other Income (Loss)   Principal transactions and other income (loss) increased by $18,758 to $12,156 for the three months ended June 30, 2023, as compared to ($6,602) for the three months ended June 30, 2022.  The following table summarizes principal transactions and other income by category.   PRINCIPAL TRANSACTIONS & OTHER INCOME (Dollars in Thousands)        Three Months Ended June 30,       2023     2022     Change   SFT   $ 182     $ (2,625 )   $ 2,807   LMND     84       (958 )     1,042   REE     42       (703 )     745   RBT     (284 )     -       (284 ) HLGN     2       (5,774 )     5,776   PAYO     (427 )     (165 )     (262 ) PWP     (35 )     (262 )     227   SPAC Fund     -       (8 )     8   Share forward agreements     9,419       -       9,419   Bridge loan exit fee     3,040       -       3,040   U.S. Insurance JV     185       (190 )     375   CREO JV     158       36       122   Stoa USA Inc./ FlipOS     -       4,504       (4,504 ) Other     (692 )     (790 )     98   Total principal transactions     11,674       (6,935 )     18,609                             IIFC revenue share     240       229       11   All other income / (loss)     242       104       138   Other income     482       333       149                             Principal transactions and other income (loss)   $ 12,156     $ (6,602 )   $ 18,758     Principal Transactions     In connection with the investments discussed below, see note 8 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q for information regarding how we determine the value of such investments. For several of the investments described below, we also had an investment in the same company that was accounted for under the equity method during the periods presented. See discussion of equity method income / (loss) below.   SFT represents equity positions in Shift Technologies, Inc. (NASDAQ: SFT), a publicly traded company that closed a business combination with Insurance SPAC.  As of June 30, 2023, we had total investment in SFT carried at fair value of $367, which was included as a component of other investments, at fair value.     LMND represents equity positions in Lemonade, Inc. (NASDAQ: LMND), a publicly traded company that acquired Metromile, Inc. ("MILE"), which closed a business combination with Insurance SPAC II.  As of June 30, 2023, we had total investment in LMND carried at fair value of $185, which was included as a component of other investments, at fair value.     REE represents equity positions of REE Automotive Ltd. (NASDAQ: REE), a publicly traded company that closed a business combination with 10X Capital Venture Acquisition Corp. As of June 30, 2023, we had a total investment in REE carried at fair value of $285, which was included as a component of other investments, at fair value.     RBT represents equity positions of Rubicon Technologies, Inc. (NYSE: RBT), a publicly traded company that closed a business combination with Founder SPAC. As of June 30, 2023, we had a total investment in RBT carried at fair value of $79, which was included as a component of other investments, at fair value.   HLGN represents equity positions of Heliogen, Inc. (NYSE: HLGN), a publicly traded company that closed a business combination with Athena Technology Acquisition Corp.  As of June 30, 2023, we had a total investment in HLGN carried at fair value of $124, which was included as a component of other investments, at fair value.     PAYO represents equity positions of Payoneer Global, Inc. (NASDAQ: PAYO), a publicly traded company that closed a business combination with FTAC Olympus Acquisition Corp.  As of June 30, 2023, we had a total investment in PAYO carried at fair value of $1,340, which was included as a component of other investments, at fair value.   79 Table of Contents   PWP represents equity positions of Perella Weinberg Partners (NASDAQ: PWP), a publicly traded company that closed a business combination with FTAC IV Acquisition Corp.  As of June 30, 2023, we had a total investment in PWP carried at fair value of $179, which was included as a component of other investments, at fair value.     The SPAC Fund invested in the equity of SPACs. We carried our investment in the SPAC Fund at its reported NAV.  Effective April 1, 2023, we began consolidating the SPAC Fund (see note 4 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q).     We have engaged in several transactions known as share forward arrangements ("SFAs"). In a typical SFA transaction, we acquire an interest in a publicly traded company and enter into an offsetting derivative with the same company.  Both the interest in the public company and the offsetting derivative are carried at fair value.  The amount shown in the table above represents the net change in fair value recorded during the period.  The interests we hold in SFA counterparties are included as a component of other investments, at fair value.  The derivatives are included as a component of other investments sold, not yet purchased, at fair value.  See note 9 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q for more information.    In 2022, we entered into a bridge loan arrangement with an early stage growth company.  The principal of the bridge loan was repaid in full during the three months ended June 30, 2023.  We earned a gross exit fee of $3,150 in connection with the maturity of this bridge loan.  This exit fee receivable was carried at its fair value of $3,040 as of June 30, 2023.  $1,050 of the exit fee receivable was paid in July 2023.  The exact timing and manner of repayment of the remaining exit fee receivable depends upon a planned upcoming merger of the early stage growth company.  We will carry the exit fee receivable at fair value as a component of our other investments, at fair value until repaid.     The U.S. Insurance JV invests in insurance company debt.  We carry our investment in the U.S. Insurance JV at its reported NAV.  As of June 30, 2023, we had a total investment in the U.S. Insurance JV carried at fair value of $3,073, which was included as a component of other investments, at fair value.    The CREO JV invests in commercial real estate debt.  We carry our investment in the CREO JV at its reported NAV.  As of June 30, 2023, we had a total investment in the CREO JV carried at fair value of $5,474, which was included as a component of other investments, at fair value.    Stoa USA Inc. / FlipOS is a private company in which we own common equity. As of June 30, 2023, we had a total investment in Stoa USA Inc. / FlipOS carried at fair value of $6,770, which was included as a component of other investments, at fair value. See note 24 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.    Other principal investments consist of realized and unrealized gains and losses from other investments reported at fair value.    Other Income (Loss)   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 $5,010.  Also, in any particular year, the IIFC revenue share earned by us cannot exceed $2,000.    80 Table of Contents   Operating Expenses   Operating expenses decreased by $1,743, or 10%, to $15,573 for the three months ended June 30, 2023, as compared to $17,316 for the three months ended June 30, 2022. As discussed in more detail below, the change was comprised of (i) a decrease of $2,213 in compensation and benefits; (ii) an increase of $23 in business development, occupancy, and equipment; (iii) an increase of $371 in subscriptions, clearing, and execution; (iv) an increase of $70 in professional fee and other operating; and (v) an increase of $6 in depreciation and amortization.   Compensation and Benefits   Compensation and benefits decreased by $2,213, or 18%, to $10,001 for the three months ended June 30, 2023, as compared to $12,214 for the three months ended June 30, 2022.   COMPENSATION AND BENEFITS (Dollars in Thousands)       Three Months Ended June 30,       2023     2022     Change   Cash compensation and benefits   $ 8,892     $ 11,132     $ (2,240 ) Equity-based compensation     1,109       1,082       27   Total   $ 10,001     $ 12,214     $ (2,213 )   Cash compensation and benefits in the table above was primarily comprised of salary, incentive compensation, severance, employer portion of payroll taxes, and benefits.  Cash compensation and benefits decreased by $2,240 to $8,892 for the three months ended June 30, 2023, as compared to $11,132 for the three months ended June 30, 2022.  The decrease was due to a decrease in incentive compensation related to revenues, partially offset by increases related to the continued build out of the CCM team.  Our total headcount decreased from 121 at June 30, 2022 to 117 at June 30, 2023.     Equity-based compensation increased by $27 to $1,109 for the three months ended June 30, 2023, as compared to $1,082 for the three months ended June 30, 2022.     Business Development, Occupancy, and Equipment   Business development, occupancy, and equipment increased  by $23 , or 2% , to $1,318  for the three months ended  June 30, 2023 , as compared to  $1,295  for the three months ended June 30, 2022 .  This increase was comprised of an increase in occupancy and equipment of $88, partially offset by a decrease in business development of $65.     Subscriptions, Clearing, and Execution     Subscriptions, clearing, and execution increased  by $371 , or 19% , to $2,343  for the three months ended  June 30, 2023 , as compared to  $1,972  for the three months ended June 30, 2022 . This increase was due to an increase of $225 in subscriptions and an increase of $146 in clearing and execution.  The increase in clearing and execution was due to an increase in ECN charges.     Professional Fee and Other Operating Expenses   Professional fee and other operating expenses increased  by $70 , or 4% , to $1,762  for the three months ended  June 30, 2023 , as compared to  $1,692  for the three months ended June 30, 2022 . This increase was comprised of an increase in professional fees of $22 and an increase in other operating expense of $48.     Depreciation and Amortization   Depreciation and amortization increased by $6, or 4%, to $149 for the three months ended June 30, 2023, as compared to $143 for the three months ended June 30, 2022.    81 Table of Contents   Non-Operating Income and Expense   Interest Expense, net     Interest expense, net increased by $524 to $1,630 for the three months ended June 30, 2023, as compared to $1,106 for the three months ended June 30, 2022.     INTEREST EXPENSE (Dollars in Thousands)       Three Months Ended June 30,       2023     2022     Change   Junior subordinated notes   $ 1,276     $ 756     $ 520   2020 Senior Notes     112       112       -   Byline Bank     158       62       96   Redeemable Financial Instrument - JKD Capital Partners I LTD     84       176       (92 )     $ 1,630     $ 1,106     $ 524     See notes 15 and 16 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.     82 Table of Contents   Income / (Loss) from Equity Method Affiliates     Income / (loss) from equity method affiliates increased by $2,533 to ($511) for the three months ended June 30, 2023, as compared to ($3,044) for the three months ended June 30, 2022.  See note 11 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.        Three Months Ended June 30,       2023     2022     Change   Insurance SPACs   $ -     $ (366 )   $ 366   Dutch Real Estate Entities     70       (257 )     327   SPAC Sponsor Entities and Other     (581 )     (2,421 )     1,840   Total   $ (511 )   $ (3,044 )   $ 2,533     SPAC Sponsor Entities includes both indirect and direct investments in SPAC Sponsor Entities.  Several of these SPAC Sponsor Entities are invested in SPACs that have completed their business combinations.  Those SPAC Sponsor Entities hold restricted and unrestricted equity interests in th