What changed in this filing

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Item 1A. Risk Factors

2025-03-12 compared with 2024-03-06 · 82 added, 47 removed, 828 unchanged (13% of the section changed)

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Continued difficulties in our Capital Markets segment due to intense competition has resulted in significant strain on our administrative, operational and financial resources and these difficulties may continue in the future.

The incurrence of additional debt could adversely effect on our financial condition and results of operation.

Our gestation repo business serves a narrow market and is likely subject to highly volatile demand.

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Our Capital Markets segment depends significantly on a limited group of customers.

Underwriting activities expose us to risk.

Failure to retain senior management and qualified personnel may result in our not being able to execute our business strategy.

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The lack of liquidity in certain investments may adversely affect our business, financial condition and results of operations.

Our investments in the equity interests of SPACs and SPAC Sponsor Entities may expose us to increased risks and liabilities.

Our investments in SPAC Sponsor Entities are highly speculative, subject to total loss, and completely illiquid prior to business combination.

Our investments in post-business combination SPACs are carried at fair value but subject to sale restrictions which could result in significant losses to our business.

Our failure to deal appropriately with actual, potential, or perceived conflicts of interest could damage our reputation and materially adversely affect our business.

Our strategic relationship with Cohen Circle, LLC ("Cohen Circle"), formerly Fintech Masala, LLC could result in conflicts of interest and termination of such relationship could result in losses to our businesses.

If we are unable to manage the risks of international operations effectively, our business could be adversely affected.

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Our principal investments are subject to various risks and expose us to a significant risk of capital loss.

Transition away from LIBOR may adversely affect our business.

Historical returns of our funds and managed accounts may not be indicative of their future results.

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Poor performance of our investment funds’ and separately managed accounts’ investments could result in a decline in our asset management revenue and earnings and investors terminating our management agreements.

If the investments we have made on behalf of our CDOs perform poorly, we will suffer a decline in our asset management revenue and earnings and the investors in our CDOs may seek to terminate our management agreements.

Our investments in SPAC Sponsor Entities are speculative, subject to total loss, and illiquid prior to business combination.

Our investments in post-business combination SPACs are carried at fair value but are subject to sale restrictions which could result in significant losses to our business.

Our strategic relationship with Cohen Circle, LLC ("Cohen Circle"), formerly Fintech Masala, LLC could result in conflicts of interest and a termination of such relationship could result in losses to our business.

Our management may allocate some portion of their time to the business of the SPAC, which may create conflicts of interest.

Any agreement to indemnify a SPAC against certain claims could negatively affect our financial results.

We may make future loans to SPACs which may not be repaid.

Our management may allocate some portion of their time to the business of the SPAC, which may create conflicts of interest.

If our risk management systems for our businesses are ineffective, we may be exposed to material unanticipated losses.

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We may not be able to keep pace with continuing changes in technology.

The development and use of artificial intelligence presents risks and challenges that could adversely impact our business, financial condition, and results of operations.

Failure to protect client data or prevent breaches of our information systems could expose us to liability/reputational damage.

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Risks Related to Our Organizational Structure and Ownership of Our Common Stock :

We could repurchase shares of our Common Stock at price levels considered excessive, the amount of our Common Stock we repurchase may decrease from historical levels, or we may not repurchase any additional shares of our Common Stock in the future.

We are dependent on distributions from the Operating LLC as a holding company.

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As a “controlled company,” our other stockholders may lose certain corporate governance protections.

Future sales of our Common Stock in the public market could lower the price of our Common Stock and impair our ability to raise funds in future securities offerings.

Your percentage ownership in the Company may be diluted in the future.

Redemptions of our outstanding LLC Units may cause substantial dilution to our existing stockholders.

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Risks Related to General and Global Factors :

The COVID-19 pandemic has caused severe disruptions in the U.S.

and global economy and is expected to continue to impact our business, financial condition and results of operations.

We may incur losses as a result of unforeseen events, including further spread of the COVID-19 pandemic, cybersecurity incidents and events, terrorist attacks, climate-related incidents, or other natural disasters.

We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflicts in Ukraine and in Israel and the surrounding areas.

Our business, financial condition and results of operations may be materially adversely affected by any negative impact on the global economy and capital markets resulting from the conflicts in Ukraine, Israel, or any other geopolitical tensions.

If we fail to maintain effective internal control over financial reporting and disclosure controls and procedures in the future, we may not be able to accurately report our financial results, which could have an adverse effect on our business.

Future sales of our Common Stock could lower the price of our Common Stock and harm our future securities offerings.

Our stockholders’ percentage ownership in the Company may be diluted in the future.

Climate change concerns and incidents could disrupt our business, adversely affect the profitability of certain of our investments, adversely affect customer activity levels, adversely affect the creditworthiness of our counterparties, and damage our reputation.

If we fail to control our costs effectively, our business could be disrupted and adversely affected.

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More generally, because our business is closely correlated to the general economic outlook, a significant deterioration in that outlook or realization of certain events would likely have an immediate and significant negative impact on our business and overall results of operations.

Unfavorable market conditions may also lead to a reduction in revenues from our new issue and advisory revenues, including from underwriting and placement activities.

Our CCM revenue, in the form of advisory services and underwriting, is directly related to general economic conditions and corresponding financial market activity.

When the outlook for such economic conditions is uncertain or negative, financial market activity generally tends to decrease, which reduces our CCM revenues.

Reduced expectations of U.S.

economic growth or a decline in the global economic outlook could cause financial market activity to decrease and negatively affect our investment banking revenues.

A prolonged economic slowdown, volatility in the markets, a recession, and increasing interest rates could impair our investments and harm our operating results.

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financial markets remain vulnerable to the potential risks posed by exogenous shocks, which could include, among other things, political and financial uncertainty in the U.S.

and the European Union (the “EU”), continued spread of the global novel coronavirus (“COVID-19”) pandemic, renewed concern about China’s economy, cybersecurity incidents and events, climate-related incidents, complications involving terrorism and armed conflicts around the world, or other challenges to global trade or travel.

and the European Union (the “EU”), continued effects of the global novel coronavirus (“COVID-19”) pandemic, renewed concern about China’s economy, cybersecurity incidents and events, climate-related incidents, complications involving terrorism and armed conflicts around the world, or other challenges to global trade or travel.

More generally, because our business is closely correlated to the macroeconomic outlook, a significant deterioration in that outlook or an exogenous shock would likely have an immediate negative impact on our overall results of operations.

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and European markets in particular, impacted and may continue to impact our business.

We have exposure to these markets and products, and if market conditions continue to worsen, the fair value of our investments and our management fees could further deteriorate.

We have exposure to these markets and products, and if market conditions continue to worsen, the fair value of our investments and our management fees could deteriorate.

In addition, market volatility, illiquid market conditions and disruptions in the global credit markets have made it extremely difficult to value certain of our securities.

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We have incurred losses for certain periods covered by this report and in the recent past and may incur losses in the future.

Although the Company recorded net income of $10.4 million for the year ended December 31, 2023, it recorded net loss of $58.7 million for the year ended December 31, 2022.

We may incur additional losses in future periods.

Although the Company recorded net income of $8.2 and $10.4 million for the years ended December 31, 2024 and 2023, respectively we may incur losses in future periods.

If we are unable to finance future losses, those losses may have a significant effect on our liquidity as well as our ability to operate our business.

In addition, the Company has incurred and may continue to incur significant expenses in connection with initiating new business activities or in connection with any expansion or reorganization of our businesses.

In addition, the Company has incurred and may further incur significant expenses in connection with initiating new business activities or in connection with any expansion or reorganization of our businesses.

We may also engage in strategic acquisitions and investments for which we may incur significant expenses.

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These challenges have materially adversely affected our Capital Markets segment’s results of operations and may continue to do so.

We intend to focus on improving the performance of our Capital Markets segment, which could place additional demands on our resources and increase our expenses.

We continue to focus on improving the performance of our Capital Markets segment, which could place additional demands on our resources and increase our expenses.

Improving the performance of our Capital Markets segment will depend on, among other things, our ability to successfully identify groups and individuals to join our firm and our ability to successfully grow our existing business lines and platforms and opportunistically expand into other complementary business areas.

It may take more than a year for us to determine whether we have successfully integrated new individuals, and lines of business and capabilities into our operations.

Generally, it may take more than a year for us to determine whether we have successfully integrated new individuals, and lines of business and capabilities into our operations.

During that time, we may incur significant expenses and expend significant time and resources toward training, integration and business development.

If we are unable to hire and retain senior management or other qualified personnel, such as salespeople and traders, we will not be able to grow our business and our financial results may be materially and adversely affected.

If we are unable to hire and retain senior management or other qualified personnel, such as salespeople, investment bankers, and traders, we will not be able to grow our business and our financial results may be materially and adversely affected.

There can be no assurance that we will be able to successfully improve the operations of our Capital Markets segment, and any failure to do so could have a material adverse effect on our ability to generate revenue and control expenses.

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The loss of or a significant reduction in demand for our services from any of these customers could have a material adverse effect on our business, financial condition and operating results.

Underwriting activities expose us to risks.

As part of our CCM business, we sometimes act as an underwriter in public offerings and other distributions of securities or as a financial advisor in connection with a capital raise.

If we act as an underwriter, we may incur losses and be subject to reputational harm to the extent that, for any reason, the underwriting syndicate in any given transaction is unable to sell the relevant securities at the anticipated price levels.

Similarly, we may incur losses and be subject to reputational harm to the extent that, for any reason, we are unable to assist a client in raising capital at anticipated price levels when we act as financial advisor.

As underwriters, we also are subject to liability for material misstatements or omissions in prospectuses and other offering documents relating to offerings which we underwrite.

In such instances, any indemnification provisions in the applicable underwriting agreement may not be enforceable or available to us, or may not be sufficient to protect us against losses arising from such liability.

Further, the associated litigation process can place operational strain on our business.

If we do not retain our senior management and continue to attract and retain qualified personnel, we may not be able to execute our business strategy.

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Our business will require a significant amount of cash, and if it is not available, our business and financial performance will be significantly harmed.

We require a substantial amount of cash to fund our investments, pay our expenses and hold our assets.

We require a substantial amount of cash to fund our operations, make investments, pay our expenses, and hold our assets.

More specifically, we require cash to:

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revenue from operations, including net trading revenue, asset management revenue, new issue and advisory revenue, interest income and dividends from our investment portfolio and potential monetization of principal investments;

securities financing including repurchase agreements and margin loans;

interest income from temporary investments and cash equivalents;

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In particular, we may need to raise additional capital in order to significantly grow our business.

In recent years, we have engaged in a number of capital raising transactions with Daniel G.

In past years, we have engaged in a number of capital raising transactions with Daniel G.

Cohen, the Executive Chairman of the Board, and/or persons or entities controlled by or close to Mr.

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However, we are limited in our ability to enter into these because of capital and financing requirements associated with such trades.

As of December 31, 2023, of our $72.2 million reported as other investments, at fair value, $12.5 million represented restricted shares of post-business combination SPACs that were subject to transfer restrictions and could not be sold and $23.6 million related to interest in SPVs and other receivables which have no ready market.

As of December 31, 2024, out of the $35.3 million reported as other investments, at fair value, $10.6 million represented restricted shares of post-business combination SPACs that were subject to transfer restrictions and could not be sold and $12.9 million related to interest in SPVs and other receivables, which have no ready market.

If these securities do not trade at the applicable per share price levels for the requisite periods of time and, in turn, the transfer restrictions thereon are never lifted, we could suffer significant losses and these securities could be rendered illiquid and even worthless, which could result in significant harm to our business and results of operations.

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reduced protection for intellectual property rights;

changes as a result of global elections, including changes in the U.S.

presidential administrations or Congress, changes to global trade policies, supply chain complications, investment restrictions, or a combination of these and other factors.

In 2024, numerous elections were held globally, including the recent U.S.

presidential election.

The outcomes of the elections are expected to result in changes in policy, which could also have adverse effects on us or the business environment in which we operate more generally.

For example, the new U.S.

presidential administration has imposed or increased tariffs, including on imports from China, and proposed imposing or increasing tariffs on U.S.

trading partners.

If we are unable to manage any of these risks effectively, our business could be adversely affected.

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Cohen’s involvement in Cohen Circle could also limit his ability to devote time to our business affairs, which may have a negative impact on our business.

In addition, Joseph Pooler, our Chief Financial Officer and Douglas Listman, our Chief Accounting Officer serve as Chief Financial Officer of certain SPACs sponsored by Cohen Circle.

If our risk management systems for our businesses are ineffective, we may be exposed to material unanticipated losses.

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A delay or failure to address technological advances and developments or an increase in costs resulting from these changes could have a material and adverse effect on our business, financial condition and results of operations.

The development and use of artificial intelligence presents risks and challenges that could adversely impact our business, financial condition, and results of operations.

We, or our third-party service providers, may develop or incorporate artificial intelligence (AI) technology in certain business processes, products, or services.

The development and use of AI presents a number of risks and challenges.

The legal and regulatory environment relating to AI is uncertain and rapidly evolving, which could require changes in our potential use and implementation of AI technology, limit our ability to integrate AI, and increase our compliance costs and the risk of non-compliance.

Additionally, we may integrate AI into our operations, technology, products, and services in the future.

AI models may produce output or take action that is incorrect, infringe on the intellectual property rights of others, or is otherwise harmful.

In addition, the complexity of AI models may make it challenging to understand why they generate particular outputs.

There can be no assurance that any products or services that utilize AI will be successful or that we will keep pace with the rapid evolution of AI.

Additionally, others may use AI to increase the frequency and severity of cybersecurity attacks against us or our third-party service providers, which could adversely impact our business and results of operations.

Failure to protect client data or prevent breaches of our information systems could expose us to liability or reputational damage .

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Such litigation or investigation, whether resolved in our favor or not or ultimately settled, could cause significant reputational harm, which could seriously harm our business.

In our Investment Management business, we make investment decisions on behalf of our clients that could result in substantial losses.

This also may subject us to the risk of legal liability or actions alleging negligent misconduct, breach of fiduciary duty or breach of contract.

These risks often may be difficult to assess or quantify and their existence and magnitude often remain unknown for substantial periods of time.

In addition, the activities of our CCM business may subject us to the risk of significant legal actions by our clients and third parties and subject us to regulatory proceedings.

Particularly in highly volatile markets, the volume of claims and amount of damages claimed in litigation and regulatory proceedings against financial advisors and underwriters can be significant.

Our business is also subject to regulation in the countries in which it operates.

As this regulatory environment continues to change (in some cases potentially significantly) it is difficult to assess future litigation and regulatory risks.

Regulatory changes make it harder for our clients to estimate future potential losses that may be incurred.

Our advisory and underwriting activities may subject us to the risk of significant legal liability to our clients and third parties, including our clients’ stockholders, under securities or other laws for materially false or misleading statements made in connection with securities and other transactions and potential liability for the fairness opinions and other advice provided to participants in corporate transactions.

We may incur significant legal expenses in defending ourselves against litigation or regulatory or governmental action.

Substantial legal liability or significant regulatory or governmental action against us could materially adversely affect our business, financial condition or results of operations and cause significant reputational harm to us, which could seriously harm our business.

The competitive pressures we face as a result of operating in highly competitive markets could have a material adverse effect on our business, financial condition, liquidity and results of operations.

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In addition, we have convertible senior debt and junior subordinated notes outstanding.

The Operating LLC will pay distributions to us in amounts necessary to satisfy our tax obligations and regularly scheduled payments of interest in connection with our convertible senior debt and our junior subordinated notes, and we are dependent on these distributions from the Operating LLC in order to generate the funds necessary to meet these obligations and liabilities.

The Operating LLC will pay distributions to us in amounts necessary to satisfy our tax obligations and regularly scheduled payments of interest in connection with our junior subordinated notes, and we are dependent on these distributions from the Operating LLC in order to generate the funds necessary to meet these obligations and liabilities.

Industry conditions and financial, business and other factors will affect our ability to generate the cash flows we need to make these distributions.

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In addition, these restrictions could potentially impose notice requirements or limit the Company’s ability to withdraw capital above the required minimum amounts (excess capital) whether through distribution or loan.

CCFEL is regulated by the CBI in Ireland and must maintain certain minimum levels of capital.

CCFESSA is regulated by the ACPR and must maintain certain minimum levels of capital.

Our failure to deal appropriately with actual, potential or perceived conflicts of interest could damage our reputation and materially adversely affect our business.

As we have expanded the scope of our relating to our Advisory and Asset Management businesses, we increasingly confront actual, potential and perceived conflicts of interest.

It is possible that actual, potential or perceived conflicts could give rise to client dissatisfaction, litigation or regulatory enforcement actions.

Identifying and managing actual, potential and perceived conflicts of interest is difficult, and our reputation could be damaged if we fail to deal appropriately with one or more actual, potential or perceived conflicts of interest.

Regulatory scrutiny of, or litigation in connection with, conflicts of interest would have a material adverse effect on our reputation which would materially adversely affect our business.

Additionally, client-imposed conflicts requirements could place additional limitations on us, for example, by limiting our ability to accept advisory engagements.

Policies, controls and procedures that we may be required to implement to address additional regulatory requirements, including as a result of foreign jurisdictions in which we operate, our underwriting activities, or to mitigate actual or potential conflicts of interest, may result in increased costs, including for additional personnel and infrastructure and information technology improvements, as well as limit our activities and reduce the benefit of positive synergies that we seek to cultivate across our businesses.

Cohen, our Executive Chairman, has significant ownership interests in the Operating LLC and competing duties to other entities (including Cohen Circle) that could create potential conflicts of interest and may result in decisions that are not in the best interests of other Cohen & Company Inc.

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Cohen & Company, Inc.

also holds units of membership interests in the Operating LLC and has the majority voting power of the LLC through a proxy granted to it by Mr.

also holds units of membership interests in the Operating LLC and has the majority voting power of the Operating LLC through a proxy granted to it by Mr.

Cohen and the DGC Trust.

On September 25, 2020, the Securities Purchase Agreement (the "SPA") dated December 30, 2019, by and among the Company, the Operating LLC, Daniel Cohen, and DGC Trust and the Amended and Restated Limited Liability Company Agreement of the Operating LLC were amended to provide that the voting proxy shall be revoked in the event that Daniel G.

On September 25, 2020, the Securities Purchase Agreement dated December 30, 2019, by and among the Company, the Operating LLC, Daniel Cohen, and DGC Trust and the Amended and Restated Limited Liability Company Agreement of the Operating LLC were amended to provide that the voting proxy shall be revoked in the event that Daniel G.

Cohen and/or his affiliates cease to beneficially own a majority of the voting securities of the Company.

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Additionally, as of December 31, 2024, Daniel G.

Cohen owns 5.4% of our Common Stock.

Cohen directly owns 4.1% of our Common Stock.

Further, as of such date, Mr.

Cohen could be deemed to be the beneficial owner of additional shares of our Common Stock representing 4.2%, which is owned by EBC 2013 Family Trust (“EBC”) as the result of Mr.

Cohen may be deemed to be the beneficial owner of additional shares of our Common Stock representing 3.9%, which is owned by EBC 2013 Family Trust (“EBC”) as the result of Mr.

Cohen’s position as trustee of the trust and as a result of the fact that Mr.

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Cohen, whose interests in our business may be different than our other stockholders, and, as a “controlled company” within the meaning of the rules of NYSE American, our other stockholders will not have the same protections afforded to stockholders of companies that are subject to certain corporate governance requirements.

Cohen currently owns approximately 41.8% of the voting power of the Company as a result of his ownership of Common Stock, Series E Preferred Stock and Series F Preferred Stock.

Cohen currently owns approximately 40.1% of the voting power of the Company as a result of his ownership of our outstanding Common Stock, Series E Preferred Stock and Series F Preferred Stock.

Further, the DGC Family Fintech Trust (the “DGC Trust”), a trust formed by Mr.

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So long as Mr.

Cohen continues to own a majority of our voting stock, he will have the ability to control the vote in any election of directors and will have the ability to approve or prevent any transaction that requires stockholder approval regardless of whether others believe the transaction are or are not in our best interests.

Cohen continues to own, directly or indirectly, a majority of our voting stock, he will have the ability to control the vote in any election of directors and will have the ability to approve or prevent any transaction that requires stockholder approval regardless of whether others believe the transaction are or are not in our best interests.

In any of these matters, the interests of Mr.

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The issuance of the shares of Common Stock upon the redemption, if any, of the issued and outstanding LLC Units may cause substantial dilution to our existing stockholders and may cause the price of our Common Stock to decline.

There are 60,930,382 units of membership interests in the Operating LLC issued and outstanding, including 23,207,975 units of membership interests in the Operating LLC beneficially owned by Daniel G.

There are 61,443,567 units of membership interests in the Operating LLC issued and outstanding, of which 22,975,501 units of membership interests in the Operating LLC are beneficially owned by Daniel G.

and 20,225,095 LLC Units are held by the DGC Family Fintech Trust of which Daniel G.

Cohen is a beneficial owner.

Subject to certain restrictions, pursuant to the Operating LLC Agreement, a holder of unrestricted units of membership interests in the Operating LLC may cause the Operating LLC to redeem such units at any time for, at the Company’s option, (A) cash or (B) one share of the Company’s Common Stock for every ten units of membership interests in the Operating LLC.

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Risks Related to General and Global Factors

The COVID-19 pandemic has caused severe disruptions in the U.S.

and global economy and is expected to continue to impact our business, financial condition and results of operations.

Our business operations are and will continue to be susceptible to impacts of the COVID-19 pandemic.

There is substantial uncertainty regarding the continuation of the COVID-19 pandemic and whether future, more widespread outbreaks will occur.

The impact that the COVID-19 pandemic continues to have on our business and will have on our business in the future will depend on numerous factors that we cannot reliably predict, including the duration and scope of the COVID-19 pandemic;

the effectiveness of vaccinations;

the implications as a result of the emerging variants of COVID-19;

governmental, business, and individuals’ actions in response to the pandemic;

and the impact on economic activity including the possibility of recession or financial market instability.

These factors may adversely impact global financial market, as well as our businesses, including our SPAC franchise business, TBA trading and mortgage-related operations.

This uncertainty may also affect our management’s accounting estimates and assumptions.

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On February 24, 2022, a full-scale military invasion of Ukraine by Russian troops was reported.

Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine has lead to market disruptions, including significant volatility in credit and capital markets.

Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine has led to market disruptions, including significant volatility in credit and capital markets.

Additionally, Russia’s prior annexation of Crimea, the recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military interventions in Ukraine have led to sanctions and other penalties being levied by the United States, European Union and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, and the so-called Luhansk People’s Republic, including the removal of certain Russian financial institutions from the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) payment system.

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New regulations or guidance relating to climate change, as well as the perspectives of shareholders, employees and other stakeholders regarding climate change, may affect whether and on what terms and conditions we engage in certain activities or offer certain products.

If we fail to implement our control our costs effectively, our business could be disrupted, and our financial results could be adversely affected.

If we fail to control our costs effectively, our business could be disrupted, and our financial results could be adversely affected.

The Company continues to look for ways to reduce infrastructure costs and reposition itself in the financial services industry.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors