# EDGAR Filing Document

**Accession Number:** 0001270436
**File Stem:** 0001437749-26-014604
**Filing Date:** 2026-5
**Character Count:** 327122
**Document Hash:** 8c0361a45021db29f387690e62758d09
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-26-014604.hdr.sgml**: 20260504

**ACCESSION NUMBER**: 0001437749-26-014604

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 118

**CONFORMED PERIOD OF REPORT**: 20260331

**FILED AS OF DATE**: 20260504

**DATE AS OF CHANGE**: 20260504

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Cohen & Co Inc.
- **CENTRAL INDEX KEY:** 0001270436
- **STANDARD INDUSTRIAL CLASSIFICATION:** SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 161685692
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-32026
- **FILM NUMBER:** 26936100

**BUSINESS ADDRESS:**
- **STREET 1:** CIRA CENTRE, 2929 ARCH STREET
- **STREET 2:** 17TH FLOOR
- **CITY:** PHILADELPHIA
- **STATE:** PA
- **ZIP:** 19104-2870
- **BUSINESS PHONE:** 215-701-9555

**MAIL ADDRESS:**
- **STREET 1:** CIRA CENTRE, 2929 ARCH STREET
- **STREET 2:** 17TH FLOOR
- **CITY:** PHILADELPHIA
- **STATE:** PA
- **ZIP:** 19104-2870

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** INSTITUTIONAL FINANCIAL MARKETS, INC.
- **DATE OF NAME CHANGE:** 20110121

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** COHEN & Co INC.
- **DATE OF NAME CHANGE:** 20091216

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** ALESCO FINANCIAL INC
- **DATE OF NAME CHANGE:** 20061006

?xml version='1.0' encoding='ASCII'? cohn20260331_10q.htm

[**Table of Contents**](#toc)

------

**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549** 

------

**FORM 10-Q**

------

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended March 31, 2026**

**or** 

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

**For the transition period from &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**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**<br> **incorporation or organization)** | **(I.R.S. Employer**<br> **Identification No.)** |
| **Cira Centre**<br> **2929 Arch Street, Suite 1703**<br> **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 |

---

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. ☒&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;&nbsp;&nbsp;&nbsp;☐ 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&nbsp;&nbsp;&nbsp;&nbsp;☐ 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&nbsp;&nbsp;&nbsp;&nbsp;☒ No

As of April 28, 2026, there were 2,477,655 shares of common stock ($0.01 par value per share) of Cohen & Company Inc. ("Common Stock") outstanding.

------

[**Table of Contents**](#toc)

**Cohen & Company Inc.** 

**FORM 10-Q** 

**INDEX TO QUARTERLY REPORT ON FORM 10-Q** 

**March 31, 2026**

---

| | | |
|:---|:---|:---|
|  |  | **Page**  |
| **PART I. FINANCIAL INFORMATION** | **PART I. FINANCIAL INFORMATION** |  |
| Item 1. | [Financial Statements (Unaudited)](#Item1_Fin) | [5](#Item1_Fin) |
|  | [Consolidated Balance Sheets—March 31, 2026 and December 31, 2025](#BalSheets) | [5](#BalSheets) |
|  | [Consolidated Statements of Operations and Comprehensive Income (Loss)—Three Months Ended March 31, 2026 and 2025](#Operations_Comp_Inc) | [6](#Operations_Comp_Inc) |
|  | [Consolidated Statements of Changes in Equity—Three Months Ended March 31, 2026 and 2025](#Equity) | [7](#Equity) |
|  | [Consolidated Statements of Cash Flows—Three Months Ended March 31, 2026 and 2025](#CF) | [9](#CF) |
|  | [Notes to Consolidated Financial Statements (Unaudited)](#Notes) | [10](#Notes) |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#Item2_MDA) | [52](#Item2_MDA) |
| Item 3. | [Quantitative and Qualitative Disclosures about Market Risk](#Item3_QQ) | [73](#Item3_QQ) |
| Item 4. | [Controls and Procedures](#Item4_Controls) | [74](#Item4_Controls) |
| **Part II. OTHER INFORMATION**  | **Part II. OTHER INFORMATION**  |  |
| Item 1. | [Legal Proceedings](#Item1_Legal) | [75](#Item1_Legal) |
| Item 1A. | [Risk Factors](#Item1A_Risk) | [75](#Item1A_Risk) |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#Item2_Unreg) | [76](#Item2_Unreg) |
| Item 3. | [Defaults Upon Senior Securities](#Item_3.__Defaults_Upon_Senior_Securities) | [76](#Item_3.__Defaults_Upon_Senior_Securities) |
| Item 4. | [Mine Safety Disclosures](#Item_4._Mine_Safety_Disclosures) | [76](#Item_4._Mine_Safety_Disclosures) |
| Item 5. | [Other Information](#Item_5._Other_Information) | [76](#Item_5._Other_Information) |
| Item 6. | [Exhibits](#Item6_Ex) | [77](#Item6_Ex) |
| [Signatures](#Signatures) | [Signatures](#Signatures) | [78](#Signatures) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2

------

[**Table of Contents**](#toc)

**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 Series Funds; 

● our role as asset manager and sponsor in our SPAC activities;

● 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, 2025. Actual results may differ materially as a result of various factors, some of which are outside our control, including the following:

● a decline in general economic conditions or the global financial markets;

● economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability;

● losses and reduced transaction volumes as a result of volatile 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 we sponsor, uncertainty of whether the SPACs in which we invest and those we sponsor will consummate a business combination, significant competition for business opportunities in the SPAC industry, write-downs or write-offs with respect to the securities that 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 including those received as non-cash consideration for investment banking services we provide; 

● 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 entities with which we conduct business; and

● the potential for litigation and other regulatory liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3

------

[**Table of Contents**](#toc)

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). Also, we post on our website our press releases and information about any public conference calls that 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, if applicable.

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.

"*Cohen Securities*" refers to Cohen & Company Securities, LLC, a wholly owned broker-dealer subsidiary of Cohen & Company Securities Holdings, L.P. ("Cohen Securities Holdings"). Cohen Securities Holdings is a wholly owned subsidiary of the Operating LLC. Prior to July 1, 2025, Cohen & Company Securities, LLC was known as J.V.B. Financial Group, LLC. "*CCM*" refers to Cohen & Company Capital Markets, a division of Cohen Securities, the Company's full-service boutique investment bank providing capital markets and special purpose acquisition company ("SPAC") advisory services to corporations, financial sponsors, investors, and institutions. "*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.

"*Securities Act*" refers to the Securities Act of 1933, as amended; and "*Exchange Act*" refers to the Securities Exchange Act of 1934, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4

------

[**Table of Contents**](#toc)

**PART I. FINANCIAL INFORMATION**

**ITEM 1. FINANCIAL STATEMENTS.** 

**COHEN & COMPANY INC.** 

**CONSOLIDATED BALANCE SHEETS**

**(Dollars in Thousands)** 

---

| | | |
|:---|:---|:---|
|  | *March 31, 2026* |  |
|  | *(unaudited)* | *December 31, 2025* |
| Assets |  |  |
| Cash and cash equivalents | $18992 | $56762 |
| Receivables from brokers, dealers, and clearing agencies | 38371 | 46194 |
| Due from related parties | 1807 | 1401 |
| Other receivables | 12838 | 8896 |
| Investments-trading | 154427 | 140576 |
| Other investments, at fair value | 61578 | 57258 |
| Receivables under resale agreements | 359602 | 357408 |
| Investments in equity method affiliates | 11258 | 6661 |
| Deferred income taxes | 4126 | 4126 |
| Goodwill | 109 | 109 |
| Right-of-use asset - operating leases | 15226 | 15406 |
| Other assets | 5803 | 5788 |
| Total assets | $684137 | $700585 |
| Liabilities |  |  |
| Payables to brokers, dealers, and clearing agencies | $22764 | $4 |
| Accounts payable and other liabilities | 16738 | 17944 |
| Due to related parties | 2809 |  |
| Accrued compensation | 55840 | 92689 |
| Lease liability - operating leases | 16755 | 16959 |
| Trading securities sold, not yet purchased | 38095 | 36617 |
| Other investments sold, not yet purchased, at fair value | 11 |  |
| Securities sold under agreements to repurchase | 402389 | 400391 |
| Debt | 28590 | 32895 |
| Total liabilities | 583991 | 597499 |
| Commitments and contingencies (See note 20) |  |  |
| Stockholders' Equity: |  |  |
| Voting Non-Convertible Preferred Stock, $0.001 par value per share, 50,000,000 shares authorized, 27,413,098 shares issued and outstanding | 27 | 27 |
| Common Stock, $0.01 par value per share, 100,000,000 shares authorized, 2,477,655 and 2,130,063 shares issued and outstanding, respectively, including 589,782 and 380,008 unvested or restricted share awards, respectively | 25 | 21 |
| Additional paid-in capital | 79868 | 78539 |
| Accumulated other comprehensive loss | (943) | (914) |
| Accumulated deficit | (27452) | (26593) |
| Total stockholders' equity | 51525 | 51080 |
| Non-controlling interest | 48621 | 52006 |
| Total equity | 100146 | 103086 |
| Total liabilities and equity | $684137 | $700585 |

---

**(**

See accompanying notes to unaudited consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5

------

[**Table of Contents**](#toc)

**COHEN & COMPANY INC.**

**CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)** 

**(Dollars in Thousands, except share or per share information)** 

**(Unaudited)** 

---

| | | |
|:---|:---|:---|
|  | *Three Months Ended March 31,* | *Three Months Ended March 31,* |
|  | *2026* | *2025* |
| Revenues |  |  |
| Investment banking and new issue | $45711 | $20164 |
| Net trading | 13200 | 9211 |
| Asset management | 2419 | 2020 |
| Principal transactions and other income | (3428) | (2655) |
| Total revenues | 57902 | 28740 |
| Operating expenses |  |  |
| Compensation and benefits | 41307 | 21666 |
| Business development, occupancy, equipment | 2383 | 1829 |
| Subscriptions, clearing, and execution | 3952 | 2174 |
| Professional fee and other operating | 4924 | 2792 |
| Depreciation and amortization | 203 | 172 |
| Total operating expenses | 52769 | 28633 |
| Operating income | 5133 | 107 |
| Non-operating income (expense) |  |  |
| Interest expense, net | (1335) | (1448) |
| Income (loss) from equity method affiliates | (527) | 2418 |
| Income before income tax expense | 3271 | 1077 |
| Income tax expense (benefit) | (182) | 139 |
| Net income | 3453 | 938 |
| Less: Net (loss) attributable to the non-convertible non-controlling interest of the Operating LLC | (718) | (173) |
| Enterprise net income | 4171 | 1111 |
| Less: Net income attributable to the convertible non-controlling interest of Cohen & Company Inc. | 2679 | 782 |
| Net income attributable to Cohen & Company Inc. | $1492 | $329 |
| Income per share data (see note 19) |  |  |
| Income per common share-basic: |  |  |
| Basic income per common share | $0.82 | $0.19 |
| Weighted average shares outstanding-basic | 1824193 | 1704510 |
| Income per common share-diluted: |  |  |
| Diluted income (loss) per common share | $0.42 | $0.19 |
| Weighted average shares outstanding-diluted | 6104521 | 5808294 |
| Comprehensive income: |  |  |
| Net income (loss) | $3453 | $938 |
| Other comprehensive (loss) item: |  |  |
| Foreign currency translation adjustments, net of tax of $0 | (77) | 116 |
| Other comprehensive income (loss), net of tax of $0 | (77) | 116 |
| Comprehensive income | 3376 | 1054 |
| Less: comprehensive income attributable to the non-controlling interest | 1906 | 691 |
| Comprehensive income attributable to Cohen & Company Inc. | $1470 | $363 |

---

See accompanying notes to unaudited consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6

------

[**Table of Contents**](#toc)

**COHEN & COMPANY INC.**

**CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY** 

**(Dollars in Thousands, except share or per share information)** 

**(Unaudited)** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | *Cohen & Company Inc.* | *Cohen & Company Inc.* | *Cohen & Company Inc.* | *Cohen & Company Inc.* | *Cohen & Company Inc.* | *Cohen & Company Inc.* |  |  |
|  | *Three Months Ended March 31, 2026* | *Three Months Ended March 31, 2026* | *Three Months Ended March 31, 2026* | *Three Months Ended March 31, 2026* | *Three Months Ended March 31, 2026* | *Three Months Ended March 31, 2026* |  |  |
|  | *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, 2025 | $27 | $21 | $78539 | $(26593) | $(914) | $51080 | $52006 | $103086 |
| Net income | *-* | *-* | *-* | 1492 | *-* | 1492 | 1961 | 3453 |
| Other comprehensive income (loss) | *-* | *-* | *-* | *-* | (22) | (22) | (55) | (77) |
| Common stock issued, net | *-* | 1 | 613 | *-* | *-* | 614 | *-* | 614 |
| Acquisition / (surrender) of additional units of consolidated subsidiary, net | *-* | *-* | 516 | *-* | (7) | 509 | (509) |  |
| Equity-based compensation | *-* |  | 398 | *-* | *-* | 398 | 894 | 1292 |
| Shares withheld for employee taxes | *-* | 3 | (198) | *-* | *-* | (195) | (443) | (638) |
| Dividends/distributions to convertible non-controlling interest | *-* | *-* | *-* | (2351) | *-* | (2351) | (6016) | (8367) |
| Redemption of convertible non-controlling interest units | *-* | *-* | *-* | *-* | *-* | *-* | (1883) | (1883) |
| Non-convertible non-controlling interest contributions | *-* | *-* | *-* | *-* | *-* | *-* | 2666 | 2666 |
| March 31, 2026 | $27 | $25 | $79868 | $(27452) | $(943) | $51525 | $48621 | $100146 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7

------

[**Table of Contents**](#toc)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | *Cohen & Company Inc.* | *Cohen & Company Inc.* | *Cohen & Company Inc.* | *Cohen & Company Inc.* | *Cohen & Company Inc.* | *Cohen & Company Inc.* |  |  |
|  | *Three Months Ended March 31, 2025* | *Three Months Ended March 31, 2025* | *Three Months Ended March 31, 2025* | *Three Months Ended March 31, 2025* | *Three Months Ended March 31, 2025* | *Three Months Ended March 31, 2025* |  |  |
|  | *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, 2024 | $27 | $20 | $76704 | $(34016) | $(1007) | $41728 | $48555 | $90283 |
| Net income | *-* | *-* | *-* | 329 | *-* | 329 | 609 | 938 |
| Other comprehensive | *-* | *-* | *-* | *-* | 34 | 34 | 82 | 116 |
| Acquisition / (surrender) of additional units of consolidated subsidiary, net | *-* | *-* | 502 | *-* | (13) | 489 | (489) |  |
| Equity-based compensation | *-* | 1 | 343 | *-* | *-* | 344 | 814 | 1158 |
| Shares withheld for employee taxes | *-* | *-* | (102) | *-* | *-* | (102) | (238) | (340) |
| Dividends/distributions to convertible non-controlling interest | *-* | *-* | *-* | (818) | *-* | (818) | (1796) | (2614) |
| Redemption of convertible non-controlling interest units | *-* | *-* | *-* | *-* | *-* | *-* | (954) | (954) |
| Sale of Interest in Vellar GP |  |  |  |  |  |  | (1691) | (1691) |
| Non-convertible non-controlling interest distributions | *-* | *-* | *-* | *-* | *-* | *-* | (1236) | (1236) |
| March 31, 2025 | $27 | $21 | $77447 | $(34505) | $(986) | $42004 | $43656 | $85660 |

---

See accompanying notes to unaudited consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8

------

[**Table of Contents**](#toc)

**COHEN & COMPANY INC.**

**Consolidated Statements of Cash Flows** 

**(Dollars in Thousands)** 

**(Unaudited)** 

---

| | | |
|:---|:---|:---|
|  | *Three Months Ended March 31,* | *Three Months Ended March 31,* |
|  | *2026* | *2025* |
| Operating activities |  |  |
| Net income | $3453 | $938 |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: |  |  |
| Equity-based compensation | 1292 | 1158 |
| Loss (gain) on other investments, at fair value | (628) | 16219 |
| Loss (gain) on other investments, sold not yet purchased | (683) | (802) |
| Loss (gain) on disposal of interest in Vellar GP |  | 836 |
| Noncash advisory fees received | (10972) | (18648) |
| (Income) loss from equity method affiliates | 527 | (2418) |
| Depreciation and amortization | 203 | 172 |
| Amortization of discount on debt | 195 | 93 |
| Deferred tax provision (benefit) |  | 85 |
| Change in operating assets and liabilities, net: |  |  |
| Change in receivables from / payables to brokers, dealers, and clearing agencies | 30583 | 10752 |
| Change in receivables from / payables to related parties, net | 2403 | (294) |
| (Increase) decrease in other receivables | (3942) | 500 |
| (Increase) decrease in investments-trading | (13851) | (12234) |
| (Increase) decrease in receivables under resale agreements | (2194) | (5441) |
| (Increase) decrease in other assets | 290 | 435 |
| Increase (decrease) in accounts payable and other liabilities | (4511) | (4965) |
| Increase (decrease) in accrued compensation | (36849) | (470) |
| Increase (decrease) in trading securities sold, not yet purchased | 1478 | (3776) |
| Increase (decrease) in securities sold under agreements to repurchase | 1998 | 11488 |
| Net cash provided by (used in) operating activities | (31208) | (6372) |
| Investing activities |  |  |
| Purchase of other investments, at fair value |  | (11186) |
| &nbsp;&nbsp;&nbsp; Purchase of other investments sold, not yet purchased, at fair value |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reduction in cash from disposal of interest in Vellar GP |  | (433) |
| Sales and returns of principal - other investments, at fair value | 7639 | 14657 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sales and returns of principal - other investments sold, not yet purchased, at fair value | 694 |  |
| Investment in equity method affiliate | (5483) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Distribution from equity method affiliate |  | 1308 |
| Purchase of furniture, equipment, and leasehold improvements | (328) | (157) |
| Net cash provided by (used in) investing activities | 2522 | 4189 |
| Financing activities |  |  |
| Repayment of 2020 Note | (4500) |  |
| Cash used to net share settle equity awards | (638) | (340) |
| Proceeds from issuance of common stock | 614 |  |
| Cohen & Company Inc. dividends | (4162) | (383) |
| Convertible non-controlling interest distributions | (1019) | (1110) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Redemption of convertible non-controlling units | (1883) | (954) |
| Non-convertible non-controlling interest investment | 2666 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-convertible non-controlling interest distributions |  | (844) |
| Net cash provided by (used in) financing activities | (8922) | (3631) |
| Effect of exchange rate on cash | (162) | 209 |
| Net increase (decrease) in cash and cash equivalents | (37770) | (5605) |
| Cash and cash equivalents, beginning of period | 56762 | 19590 |
| Cash and cash equivalents, end of period | $18992 | $13985 |

---

See accompanying notes to unaudited consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9

------

[**Table of Contents**](#toc)

**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. 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 *March 31, 2026*, the Company had $1.3 billion in assets under management ("AUM").

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. "Cohen Securities" refers to Cohen & Company Securities, LLC, a wholly owned broker-dealer subsidiary of Cohen & Company Securities Holdings, L.P ("Cohen Securities Holdings"). Cohen Securities Holdings is a wholly owned subsidiary of the Operating LLC. Prior to *July 1, 2025,* Cohen & Company Securities, LLC was known as J.V.B. Financial Group, LLC. "CCM," a division of Cohen Securities, refers to Cohen & Company Capital Markets, the Company's full-service boutique investment bank providing capital markets and SPAC advisory services to corporations, financial sponsors, investors, and institutions. "CCFESA" refers to Cohen & Company Financial (Europe) S.A., a consolidated subsidiary regulated by the Autorite de Controle Prudentiel et de Resolution ("ACPR") in France.

The Company's business is organized into the following three business segments.

<u>Capital Markets</u>: The Company's Capital Markets business segment consists primarily of sales, trading, underwriting, gestation repo financing, new issue placements in corporate and securitized products, and advisory services. The Company's 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 and loans, special purpose acquisition corporation ("SPAC") equity, preferred equity, asset backed securities ("ABS"), mortgage-backed securities ("MBS"), residential mortgage-backed securities ("RMBS"), collateralized bond obligations ("CBOs"), collateralized mortgage obligations ("CMOs"), municipal securities, to-be-announced securities ("TBAs") and other forward agency MBS contracts, Small Business Administration ("SBA") loans, U.S. government bonds, U.S. government agency securities, brokered deposits and certificates of deposit ("CDs") for small banks, and hybrid capital of financial institutions including whole loans and other structured financial instruments. The Company operates its capital markets activities primarily through its subsidiaries: Cohen Securities in the United States and CCFESA in Europe. CCM is a division of Cohen Securities.

<u>Asset Management</u>: The Company's Asset Management business segment manages assets within investment funds, managed accounts, joint ventures, and collateralized debt obligations ("CDOs") (collectively referred to as "Investment Vehicles"). The Company's Asset Management business segment includes its fee-based asset management operations, which include ongoing base and incentive management fees.

<u>Principal Investing</u>: The Company's Principal Investing business segment is comprised of investments that 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *10*

------

[**Table of Contents**](#toc)

The Company generates its revenue by business segment primarily through the following activities.

<u>Capital Markets</u> 

● Investment banking and new issue revenue comprised of (a) origination fees for newly created financial instruments, (b) revenue from advisory services, (c) revenue from underwriting, (d) new issue revenue associated with arranging and placing newly created financial instruments, and (e) any investment returns on financial instruments that the Company has acquired or received as consideration for services provided by CCM.

● 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; and

● Revenue earned on the Company's gestation repo financing program. 

<u>Asset Management</u> 

● 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.

<u>Principal Investing</u> 

● 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, which were *not* acquired as part of the CCM business; and

● Income and loss earned on equity method investments.

***2.* BASIS OF PRESENTATION** 

The financial statements of the Company included herein were prepared in conformity with U.S. GAAP for interim financial information and with the instructions to Form *10*-Q and Article *10* of Regulation S-*X.* Accordingly, they do *not* include all of the information and footnotes required by U.S. GAAP for complete financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair presentation of results for the interim month periods. All intercompany accounts and transactions have been eliminated in consolidation. The results for the *three* months ended *March 31, 2026* and *2025* 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, 2025*.

During the year ended *December 31, 2025,* the Company began classifying principal transactions income (loss) related to CCM activity from principal transactions to investment banking and new issue. For the *three*-month period ended *March 31, 2025, (*$13,075) of the principal transaction loss has been reclassified to investment banking and new issue. This reclassification had *no* effect on previously reported net income.

The Company's management has evaluated subsequent events through the date of issuance of the Consolidated Financial Statements included herein. There have been *no* subsequent events, except as already disclosed, that occurred during such period that would require disclosure in this Form *10*-Q or would be required to be recognized in the Consolidated Financial Statements as of and for the *three* months ended *March 31, 2026*.

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, 2025*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *11*

------

[**Table of Contents**](#toc)

***3.* SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** 

*A. Adoption of New Accounting Standards* 

In *December 2023,* the FASB issued ASU *2023*-*09, Income Taxes (Topic *740*). The amendments in this ASU address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The Company's adoption of the provisions of ASU *2023*-*09,* effective *January 1, 2025,* did *not* have an effect on the Company's consolidated financial statements.

In *March 2024,* the FASB issued ASU *2024*-*01, Compensation—Stock Compensation (Topic *718*): Scope Application of Profits Interest and Similar Awards*. The ASU provides an illustrative example intended to demonstrate how entities that account for profits interest and similar awards would determine whether a profits interest award should be accounted for as share-based payment arrangements in accordance with FASB Accounting Standards Codification (FASB ASC) *718, Compensation-Stock Compensation*. The Company's adoption of the provisions of ASU *2024*-*01,* effective *January 1, 2025,* did *not* have an effect on the Company's consolidated financial statements.

In *March 2024,* the FASB issued ASU *2024*-*02, Codification Improvements — Amendments to Remove References to the Concepts Statements.* The ASU amends the Codification to remove references to various concepts statements. In most instances, the references are extraneous and *not* required to understand or apply the guidance. In other instances, the references were used in prior Statements to provide guidance in certain topical areas. The Company's adoption of the provisions of ASU *2024*-*02,* effective *January 1, 2025,* did *not* have an effect on the Company's consolidated financial statements.

In *March 2025,* the FASB issued ASU *2025*-*02, Liabilities (*405*): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin *No. 122,** which amends an SEC paragraph noted in the Codification pursuant to the issuance of SEC Staff Accounting Bulletin *No. 122,* which removes the text of SAB Topic *5* FF, Accounting for Obligations to Safeguard Crypto-Assets an Entity Holds for its Platform Users. The ASU was effective immediately. The Company's adoption of the provisions of ASU *2024*-*02,* effective *January 1, 2025,* did *not* have an effect on the Company's consolidated financial statements.

In *November 2024,* the FASB issued ASU *2024*-*04, Debt*— *Debt with Conversion and Other Options (Subtopic *470*-*20*): Induced Conversions of Convertible Debt Instruments,* which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion or extinguishment of convertible debt. The Company's adoption of the provisions of ASU *2024*-*04,* effective *January 1, 2026,* did *not* have an effect on the Company's consolidated financial statements.

In *July 2025,* the FASB issued ASU *2025*-*05, Financial Instruments—Credit Losses (Topic *326*): Measurement of Credit Losses for Accounts Receivable and Contract Assets.* The amendments provide all entities with a practical expedient to assume that current conditions as of the balance sheet date do *not* change for the remaining life of the assets when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic *606.* The Company's adoption of the provisions of ASU *2025*-*05,* effective *January 1, 2026,* did *not* have an effect on the Company's consolidated financial statements.

*B. Recent Accounting Developments*

In *November 2024,* the FASB issued ASU *2024*-*03, Income Statement* — *Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic *220*-*40*): Disaggregation of Income Statement Expenses.* The ASU requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statements. The ASU is effective for all entities for annual reporting periods beginning after *December 15, 2026* and interim reporting periods beginning after *December 15, 2027,* which was clarified in ASU *2025*-*01.* The Company is currently evaluating the new guidance to determine the impact it *may* have on its consolidated financial statements.

In *May 2025,* the FASB issued ASU *2025*-*03, Business Combinations (Topic *805*) and Consolidation (Topic *810*): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entit*y. The ASU revises current guidance for determining the accounting acquirer for a transaction effected primarily by exchanging equity interests in which the legal acquiree is a variable interest entity that meets the definition of a business. The amendments require an entity to consider the same factors that are currently required for determining which entity is the accounting acquirer in other acquisition transactions. The ASU is effective for annual reporting periods beginning after *December 15, 2026* and interim reporting within those annual reporting periods. Early adoption is permitted in an interim or annual reporting period in which financial statements have *not* yet been issued (or made available for issuance). The Company is currently evaluating the new guidance to determine the impact it *may* have on its consolidated financial statements.

In *May 2025,* the FASB issued ASU *2025*-*04, Compensation— Stock Compensation (Topic *718*) and Revenue from Contracts with Customers (Topic *606*): Clarifications to Share-Based Consideration Payable to a Customer.* The amendments in this ASU affect the timing of revenue recognition for entities that offer to pay share-based consideration (e.g., equity instruments) to a customer (or to other parties that purchase the entity's goods or services from the customer) to incentivize the customer (or its customers) to purchase its goods and services. Specifically, the amendments clarify the requirements for share-based consideration payable to a customer that vest upon the customer purchasing a specified volume or monetary amount of goods and services from the entity. The ASU is effective for annual reporting periods beginning after *December 15, 2026* and interim reporting within those annual reporting periods. Early adoption is permitted in an interim or annual reporting period in which financial statements have *not* yet been issued (or made available for issuance). The Company is currently evaluating the new guidance to determine the impact it *may* have on its consolidated financial statements.

In *September 2025,* the FASB issued ASU *2025*-*06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic *350*-*40*): Targeted Improvements to the Accounting for Internal-Use Software*. The amendments in this ASU require that an entity capitalize software costs when both management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended (referred to as the "probable-to-complete recognition threshold"). In evaluating the probable-to complete recognition threshold, an entity is required to consider whether there is significant uncertainty associated with the development activities of the software. The ASU is effective for all entities for annual reporting periods beginning after *December 15, 2027,* and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the new guidance to determine the impact it *may* have on its consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *12*

------

[**Table of Contents**](#toc)

In *September 2025,* the FASB issued ASU *2025*-*07, Derivatives and Hedging (Topic *815*) and Revenue from Contracts with Customers (Topic *606*): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract.* The ASU clarifies derivative scope exceptions for certain contracts with underlings that are based on the operations or activities of *one* of the parties to the contract. The ASU also clarifies the applicability of ASC Topic *606,* Revenue from Contracts with Customers, and its interaction with other ASC Topics (including ASC Topic *815* on derivatives and hedging and ASC Topic *321* on equity securities), in the accounting for share-based noncash consideration (such as warrants or shares) received from a customer for the transfer of goods or services. The ASU is effective for annual periods beginning after *December 15, 2026* and interim periods within those periods. The Company is currently evaluating the new guidance to determine the impact it *may* have on its consolidated financial statements.

In *December 2025,* the FASB issued ASU *2025*-*11, Interim Reporting (Topic *270*) Narrow- Scope Improvements*. The amendments in this ASU do *not* change the fundamental nature of interim reporting or expand or reduce current interim disclosure. The amendments in this ASU clarify the guidance in ASC Topic *270* by providing a comprehensive list of required interim disclosures and codifying a disclosure principle that requires the Company to disclose events and changes that occur after the end of the most recent annual reporting period that have a material impact on its consolidated financial statements. The amendments in this ASU are effective for interim periods within annual reporting periods beginning after *December 15, 2027.* The Company is currently evaluating the new guidance to determine the impact it *may* have on its consolidated financial statements.

In *December 2025,* the FASB issued ASU *2025*-*12, Codification Improvements (Topic *815*)* The amendments in this ASU update the FASB Accounting Standards Codification for a broad range of Topics arising from technical corrections, unintended application of the Codification, clarifications, and other minor improvements. The amendments in this ASU are effective for all entities for annual periods beginning after *December 15, 2026,* and interim periods within those annual periods. 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.

<u>Cash and Cash equivalents</u>: 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.

<u>Investments-trading</u>: These amounts are carried at fair value. The fair value is based on quoted market prices of an active exchange, independent broker market quotations, market price quotations from *third*- party pricing services, or valuation models when quotations are *not* available.

<u>Other investments, at fair value</u>: 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.

<u>Receivables under resale agreements</u>: 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.

<u>Trading securities sold, *not* yet purchased</u>: 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.

<u>Other investments sold, *not* yet purchased</u>: 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.

<u>Securities sold under agreements to repurchase</u>: The liabilities for securities sold under agreements to repurchase are carried at their contracted repurchase price, have short-term maturities, and are repriced frequently with amounts normally due in *one* month or less, 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.

<u>Debt</u>: These amounts are carried at outstanding principal less unamortized discount and deferred financing costs (if applicable). 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 *March 31, 2026* and *December 31, 2025*, the fair value of the Company's debt was estimated to be $36,383 and $42,369, respectively. The estimated fair value measurements of the debt are generally based on discounted cash flow models prepared by the Company's management primarily using discount rates for similar instruments issued to companies with similar credit risks to the Company and are generally classified within level *3* of the valuation hierarchy.

<u>Derivatives</u>: 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *13*

------

[**Table of Contents**](#toc)

***4.* OTHER RECENT BUSINESS TRANSACTIONS OR EVENTS**

*Columbus Circle Capital Corp. II*

On *February 12, 2026,* Columbus Circle Capital Corp. II (NASDAQ: CMIIU) (the "Columbus Circle II SPAC"), a blank check company incorporated as a Cayman Islands exempted company and formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with *one* or more businesses (each a "Business Combination"), completed the sale of 23,000,000 units (the "Units") in its initial public offering (the "IPO"), which included 3,000,000 units issued pursuant to the underwriters' full exercise of their over-allotment option.

The Operating LLC owns a portion of, and is the managing member and a member of, Columbus Circle *2* Sponsor Corp LLC, the sponsor of the Columbus Circle II SPAC (the "Columbus Circle II Sponsor"). CCM acted as the lead underwriter in the IPO.

Each Unit consists of one Class A ordinary share of the Columbus Circle II SPAC, par value $0.0001 per share ("Class A Ordinary Shares"), and one-*third* of *one* warrant (each, a "Warrant"); each whole Warrant entitles the holder to purchase one Class A Ordinary Share for $11.50 per share. The Units were sold in the IPO at an offering price of $10.00 per Unit, for gross proceeds of $230,000 (before underwriting discounts and commissions and offering expenses).

If the Columbus Circle II SPAC fails to consummate a Business Combination within the *first 24* months following the IPO, its corporate existence will cease except for the purposes of winding up its affairs and liquidating its assets, unless the Columbus Circle II SPAC's shareholders approve an amendment to the Columbus Circle II SPAC's amended and restated memorandum and articles of association (the "SPAC Articles") to extend the amount of time the Columbus Circle II SPAC will have to consummate an initial Business Combination.

The Columbus Circle II Sponsor purchased an aggregate of 265,000 of the Columbus Circle II SPAC's placement units ("Placement Units") in a private placement that occurred simultaneously with the IPO (the "Private Placement") for an aggregate of $2,650, or $10.00 per Placement Unit. Additionally, CCM used its underwriting fee of $3,600 to purchase 360,000 Placement Units in the Private Placement for an aggregate of $3,600. Each Placement Unit consists of *one* Class A Ordinary Share and *one*-*third* of *one* warrant (a "Placement Warrant"). The Placement Units are identical to the Units sold in the IPO except that Placement Units (including the securities comprising such units and the Class A Ordinary Shares issuable upon exercise of the Placement Warrants) (i) *may not,* subject to certain limited exceptions, be transferred, assigned or sold by the holders until *30* days after the completion of the Columbus Circle II SPAC's initial Business Combination, (ii) will be entitled to certain registration rights, and (iii) with respect to the Placement Warrants held by CCM and/or its designees, will *not* be exercisable more than *five* years from the commencement of sales in the IPO in accordance with FINRA rules. Subject to certain limited exceptions, the Placement Units (including the underlying Placement Warrants and Class A Ordinary Shares and the Class A Ordinary Shares issuable upon exercise of the Placement Warrants) will *not* be transferable, assignable or salable until *30* days after the completion of the Columbus Circle II SPAC's initial Business Combination.

The entire $2,650 invested by the Columbus Circle II Sponsor in consideration for the above-described 265,000 Placement Units of the Columbus Circle II SPAC was raised from *third* party investors. As the managing member of the Columbus Circle II Sponsor, the Operating LLC consolidates the Columbus Circle II Sponsor and treats the Columbus Circle II Sponsor's investment in the Columbus Circle II SPAC as an equity method investment. The $2,650 raised from *third* party investors is treated by the Operating LLC as non-controlling interest.

A total of $230,000 of the net proceeds from the Private Placement and the IPO were placed in a trust account. Except for the withdrawal of interest to pay taxes (or dissolution expenses if a Business Combination is *not* consummated), *none* of the funds held in the trust account will be released until the earliest of (i) the completion of the Columbus Circle II SPAC's initial Business Combination, (ii) the redemption of the Columbus Circle II SPAC's public Class A Ordinary Shares if the Columbus Circle II SPAC is unable to complete its initial Business Combination within *24* months from the completion of the IPO, and (iii) the redemption of the Columbus Circle II SPAC's public Class A Ordinary Shares properly submitted in connection with a shareholder vote to amend the SPAC Articles to (A) modify the substance or timing of the Columbus Circle II SPAC's obligation to allow redemption in connection with its initial Business Combination or to redeem *100%* of the Columbus Circle II SPAC's public shares if the Columbus Circle II SPAC has *not* consummated an initial Business Combination within *24* months from the completion of the IPO, or (B) with respect to any other material provisions relating to the rights of holders of Class A Ordinary Shares or pre-initial Business Combination activity. If the Columbus Circle II SPAC does *not* complete a Business Combination, the Placement Units will expire and be worthless.

The Columbus Circle II Sponsor holds an aggregate of 7,666,667 founder shares in the Columbus Circle II SPAC. Subject to certain limited exceptions, the founder shares will *not* be transferable or salable until the earlier to occur of: (i) *six* months after the completion of the IPO, and (ii) the date on which the Columbus Circle II SPAC completes a liquidation, merger, share exchange or other similar transaction after its initial Business Combination that results in all of the Columbus Circle II SPAC's shareholders having the right to exchange their Class A Ordinary Shares underlying the founder shares for cash, securities or other property.

Certain non-controlling interests in the Columbus Circle II Sponsor, including executives and key employees of the Operating LLC, purchased membership interests in the Columbus Circle II Sponsor, either directly or indirectly, and have an interest in the Columbus Circle II SPAC's founder shares through such membership interests in the Columbus Circle II Sponsor. The number of the Columbus Circle II SPAC's founders shares in which such non-controlling interests in the Columbus Circle II Sponsor, including such executives and key employees of the Operating LLC, have an interest in through the Columbus Circle II Sponsor will *not* be finally and definitively determined until consummation of a Business Combination. The number of the Columbus Circle II SPAC's founder shares currently allocated to the Operating LLC is 2,627,383, but such number of founder shares will also *not* be finally and definitively determined until the consummation of a Business Combination.

In connection with the IPO, the Columbus Circle II Sponsor has agreed to indemnify the Columbus Circle II SPAC for all claims by *third* parties for services rendered or products sold to the Columbus Circle II SPAC, or a prospective target business with which the Columbus Circle II SPAC has entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement (except for the Columbus Circle II SPAC's independent registered public accounting firm), to the extent such claims reduce the amount of funds in the Columbus Circle II SPAC's trust account to below the lesser of (i) $10.00 per share of Class A Ordinary Shares, and (ii) the actual amount per share of Class A Ordinary Shares held in the Columbus Circle II SPAC's trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the Columbus Circle II SPAC's trust assets, in each case net of taxes, provided that such liability will *not* apply to any claims (A) by a *third* party or prospective target business who executed a waiver of any and all rights to the monies held in the Columbus Circle II SPAC's trust account or (B) under the Columbus Circle II SPAC's indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act of *1933,* as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *14*

------

[**Table of Contents**](#toc)

The Columbus Circle II Sponsor loaned to the Columbus Circle II SPAC approximately $485 to cover IPO expenses, which was repaid in full at the closing of the IPO. The Columbus Circle II Sponsor and its affiliates, including the Operating LLC, *may* commit to loan the Columbus Circle II SPAC up to an additional *$1,500* to cover operating and acquisition related expenses following the IPO. These loans will bear *no* interest and, if the Columbus Circle II SPAC consummates a Business Combination in the required time frame, the loans are to be repaid from the funds held in the Columbus Circle II SPAC's trust account. The loans are convertible into private placement units at *$10.00* per unit and, accordingly, are convertible into an additional *150,000* private Class A Ordinary Shares and *50,000* Private Placement Warrants exercisable at *$11.50* per share. If the Columbus Circle II SPAC does *not* consummate a Business Combination in the required time frame, *no* funds from the Columbus Circle II SPAC's trust account can be used to repay the loans.

*Columbus Circle Capital Corp. I* 

On *May 19, 2025,* Columbus Circle Capital Corp. I (the "Columbus Circle SPAC"), a blank check company incorporated as a Cayman Islands exempted company and formed for the purpose of effecting a Business Combination, completed the sale of 25,000,000 units in its IPO, which included 3,000,000 units issued pursuant to the underwriters' partial exercise of their over-allotment option.

On *June 23, 2025,* the Columbus Circle SPAC entered into a definitive business combination agreement with ProCap BTC, LLC, a Delaware limited liability company ("ProCap BTC"), ProCap Financial, Inc., a Delaware corporation ("ProCap Financial"), Crius SPAC Merger Sub, Inc., a Delaware corporation ("SPAC Merger Sub"), Crius Merger Sub, LLC, a Delaware limited liability company ("Company Merger Sub"), and Inflection Points Inc., d/b/a Professional Capital Management, a Delaware corporation (the "Business Combination Agreement"). Pursuant to the transactions contemplated by the Business Combination Agreement (the "Business Combination"), the Columbus Circle SPAC and ProCap BTC would merge into SPAC Merger Sub and Company Merger Sub, respectively, and become wholly-owned subsidiaries of ProCap Financial, and ProCap Financial became a publicly traded company. Proceeds from the proposed Business Combination, if any, after satisfaction of redemption payments to the Columbus Circle SPAC's public shareholders and transaction expenses, were expected to be used by ProCap Financial to purchase bitcoin, in connection with ProCap Financial's business plans and strategies.

On *December 5, 2025,* the transactions contemplated by the Business Combination were consummated (the "Closing"). Upon the Closing, Columbus Circle SPAC and ProCap BTC merged into SPAC Merger Sub and Company Merger Sub, respectively, and became wholly-owned subsidiaries of ProCap Financial. ProCap Financial became the go-forward company following the Closing. ProCap Financials' common stock and warrants commenced trading on the Nasdaq Global Market on *December 8, 2025* under the symbols "BRR" and "BRRWW," respectively.

From *May 19, 2025,* until *December 5, 2025,* the Company consolidated the sponsor of the Columbus Circle SPAC, which treated its investment in the Columbus Circle SPAC under the equity method of accounting. The sponsor distributed all of its assets and ceased operations in *December 2025.* 

As of *March 31, 2026,* the Company held 2,151,666 shares of BRR, which were allocated to the Company by the sponsor of the Columbus Circle SPAC. As of *March 31, 2026,* the Company carried these shares at a value of $4,540 as a component of other investments, at fair value in the Company's consolidated balance sheet. The BRR shares are subject to certain transfer restrictions, which restrictions will lapse and the BRR shares will *no* longer be subject to these transfer restrictions upon the earliest to occur of the following: (i) the *second* anniversary of the Closing, (ii) if the closing price of ProCap Financials' common stock equals or exceeds $10.21 per share (subject to customary adjustments) for any *20* trading days within any consecutive *30*-trading day period, and (iii) if the dollar volume-weighted average price for Bitcoin (BTC) during any *one hundred twenty* (*120*)-hour period equals or exceeds $140 during any *five*-day period. Any further change in value of these shares until final liquidation will be recorded as principal transactions gain or loss in the Company's consolidated statement of operations. For the *three*-month period ended *March 31, 2026,* the Company recorded a loss of ($3,055) related to these shares.

In addition, the Company served as underwriter and advisor to the Columbus Circle SPAC. As partial consideration for these services, the Company received 392,000 shares of BRR and 196,000 warrants. As of *March 31, 2026,* the shares and warrants were carried at a value of $882 as a component of other investments, at fair value in the Company's consolidated balance sheet. For the *three*-month period ended *March 31, 2026,* the Company recorded a loss of ($639) related to these shares and warrants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *15*

------

[**Table of Contents**](#toc)

***5.* INVESTMENT BANKING AND NEW ISSUE AND NET TRADING**

INVESTMENT BANKING AND NEW ISSUE

(Dollars in Thousands)

---

| | | | |
|:---|:---|:---|:---|
|  | *Three Months Ended March 31, 2026* | *Three Months Ended March 31, 2026* | *Three Months Ended March 31, 2026* |
|  | *Cash* | *Non-Cash* | *Total* |
| CCM - Underwriting | $17395 | $5717 | $23112 |
| CCM - Advisory and other new issue | 12105 | 5255 | 17360 |
| Other - Origination |  |  |  |
| Total | $29500 | $10972 | $40472 |
| Gains / (losses) on CCM financial instruments received as non-cash consideration |  |  | 5239 |
| Investment banking and new issue |  |  | $45711 |
|  | *Three Months Ended March 31, 2025* | *Three Months Ended March 31, 2025* | *Three Months Ended March 31, 2025* |
|  | *Cash* | *Non-Cash* | *Net* |
| CCM - Underwriting | $2225 | $1634 | $3859 |
| CCM - Advisory and other new issue | 12366 | 17014 | 29380 |
| Other - Origination |  |  |  |
| Total | $14591 | $18648 | $33239 |
| Gains / (losses) on CCM financial instruments received as non-cash consideration |  |  | (13075) |
| Investment banking and new issue |  |  | $20164 |

---

As of *March 31, 2026,* the Company had $41,995 included as a component of other investments, at fair value, representing the remaining carrying amount of the financial instruments received as non-cash investment banking and new issue revenue. In terms of the remaining exposure to the Company from monetization of these amounts, this would represent the gross potential loss the Company could incur if these assets were liquidated for *$0.* As of *March 31, 2026,* the Company has also accrued $24,592 in compensation to employees related to these amounts. The amount finally due to the employees is based on the final monetized amount (see note *11*). The amount of compensation accrued presumes these investments are monetized for their carrying amount. Accordingly, if the $41,995 of other investments, at fair value were liquidated for *$0,* the net loss to the Company would be $17,403.

Net trading consisted of the following in the periods presented.

NET TRADING

(Dollars in Thousands)

---

| | | |
|:---|:---|:---|
|  | Three Months Ended March 31, | Three Months Ended March 31, |
|  | 2026 | 2025 |
| Net realized gains (losses) - trading inventory | $7471 | $4228 |
| Net unrealized gains (losses) - trading inventory | (831) | 625 |
| Net gains and losses | 6640 | 4853 |
| Interest income- trading inventory | 792 | 830 |
| Interest income-reverse repos | 4062 | 9541 |
| Interest income | 4854 | 10371 |
| Interest expense-repos | (3708) | (8502) |
| Interest expense-margin payable | (117) | (651) |
| Interest expense | (3825) | (9153) |
| Other trading revenue | 5531 | 3140 |
| Net trading | $13200 | $9211 |

---

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 from the Company's agency repo business (see note *10*).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *16*

------

[**Table of Contents**](#toc)

***6.* RECEIVABLES FROM AND PAYABLES TO BROKERS, DEALERS, AND CLEARING AGENCIES** 

Amounts receivable from brokers, dealers, and clearing agencies consisted of the following.

RECEIVABLES FROM BROKERS, DEALERS, AND CLEARING AGENCIES

(Dollars in Thousands)

---

| | | |
|:---|:---|:---|
|  | *March 31, 2026* | *December 31, 2025* |
| Deposits with clearing agencies | $250 | $250 |
| Unsettled regular way trades, net | 7325 | 3281 |
| Receivables from clearing agencies | 30796 | 42663 |
| Receivables from brokers, dealers, and clearing agencies | $38371 | $46194 |

---

Amounts payable to brokers, dealers, and clearing agencies consisted of the following.

PAYABLES TO BROKERS, DEALERS, AND CLEARING AGENCIES

(Dollars in Thousands)

---

| | | |
|:---|:---|:---|
|  | *March 31, 2026* | *December 31, 2025* |
| Margin payable | $22764 | $4 |
| Payables to brokers, dealers, and clearing agencies | $22764 | $4 |

---

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. As of *December 31, 2025,* the Company had *no* margin payable to Pershing LLC; the amount shown in the table above represents interest expense on a margin loan balance during the month of *December 2025.* 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.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *17*

------

[**Table of Contents**](#toc)

***7.* FINANCIAL INSTRUMENTS** 

*Investments—Trading* 

Investments-trading consisted of the following.

INVESTMENTS - TRADING

(Dollars in Thousands)

---

| | | |
|:---|:---|:---|
|  | *March 31, 2026* | *December 31, 2025* |
| Corporate bonds and redeemable preferred stock | $21354 | $18449 |
| Derivatives | 14975 | 4651 |
| Equity securities | 7415 | 10424 |
| Municipal bonds | 852 | 3813 |
| RMBS | 3 | 3 |
| SBA loans | 42286 | 43090 |
| U.S. government agency MBS and CMOs | 49194 | 42471 |
| U.S. government agency debt securities | 18348 | 17675 |
| Investments-trading | $154427 | $140576 |

---

Substantially all of the Company's investments-trading other than SBA loans serve as collateral for the Company's margin loan payable. See note *6.* The SBA loans serve as collateral for the Company's repurchase obligations. See note *10.*

*Trading Securities Sold, *Not* Yet Purchased* 

Trading securities sold, *not* yet purchased consisted of the following.

TRADING SECURITIES SOLD, *NOT* YET PURCHASED

(Dollars in Thousands)

---

| | | |
|:---|:---|:---|
|  | *March 31, 2026* | *December 31, 2025* |
| Corporate bonds and redeemable preferred stock | $2764 | $8107 |
| Derivatives | 13801 | 4245 |
| Equity securities | 9 | 463 |
| U.S. government agency debt securities | 68 |  |
| U.S. Treasury securities | 21453 | 23802 |
| Trading securities sold, not yet purchased | $38095 | $36617 |

---

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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *18*

------

[**Table of Contents**](#toc)

*Other Investments, at Fair Value* 

Other investments, at fair value consisted of the following.

OTHER INVESTMENTS, AT FAIR VALUE

(Dollars in Thousands)

---

| | | |
|:---|:---|:---|
|  | *March 31, 2026* | *December 31, 2025* |
| Equity securities | $13617 | $21457 |
| Placement units and warrants | 33223 | 19997 |
| Corporate bonds and redeemable preferred stock | 520 | 535 |
| Notes receivable | 2242 | 2783 |
| CK Capital Value Fund | 1184 | 1171 |
| CREO JV | 8891 | 8940 |
| U.S. Insurance JV | 1901 | 2375 |
| Other investments, at fair value | $61578 | $57258 |

---

Notes receivable include convertible and non-convertible notes receivable from various counterparties in connection with CCM's business. These receivables are carried at fair value.

A total of $1,747 and $2,439 of the amounts shown as other investments, at fair value above served as collateral for the Company's margin loan payable as of *March 31, 2026* and *December 31, 2025*, 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)

---

| | | |
|:---|:---|:---|
|  | *March 31, 2026* | *December 31, 2025* |
| Equity derivatives | $11 | $- |
| Other investments sold, not yet purchased, at fair value | $11 | $- |

---

  ****

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *19*

------

[**Table of Contents**](#toc)

***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) or that have fair values that are readily determinable; and

● investments in residential mortgage loans.

The changes in fair value (realized and unrealized gains and losses) of these instruments for which the Company has elected the fair value option are recorded in principal transactions and other income in the consolidated statements of operations. All of the investments for which the Company has elected the fair value option are included as a component of other investments, at fair value in the consolidated balance sheets.

The Company recognized net gains (losses) of $628 and ($16,219) related to changes in fair value of investments that were included as a component of other investments, at fair value during the *three* months ended *March 31, 2026* and *2025*, respectively. The Company recognized net gains (losses) of $683 and $802 related to changes in fair value of investments that were included as a component of other investments, sold, *not* yet purchased, during the *three* months ended *March 31, 2026* and *2025*, 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*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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 with inputs that are derived, other than quoted prices, and observable for substantially the full term of the asset or liability; or

*4.* Pricing models with inputs that are derived principally from or corroborated by observable market data through correlation or other means for substantially the full term of the asset or liability.

Level *3*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *20*

------

[**Table of Contents**](#toc)

The following tables present information about the Company's assets and liabilities measured at fair value as of *March 31, 2026* and *December 31, 2025*, and indicate the valuation hierarchy of the valuation techniques utilized by the Company to determine such fair value.

FAIR VALUE MEASUREMENTS ON A RECURRING BASIS

 *March 31, 2026*

(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: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Corporate bonds and redeemable preferred stock | $21354 | $*-* | $21354 | $*-* |
| Derivatives | 14975 | *-* | 14975 | *-* |
| Equity securities | 7415 | 7360 | 55 | *-* |
| Municipal bonds | 852 | *-* | 852 | *-* |
| RMBS | 3 | *-* | 3 | *-* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SBA loans | 42286 | *-* | 42286 | *-* |
| U.S. government agency MBS and CMOs | 49194 | *-* | 49194 | *-* |
| U.S. government agency debt securities | 18348 | *-* | 18348 | *-* |
| Total investments - trading | $154427 | $7360 | $147067 | $*-* |
| Other investments, at fair value: |  |  |  |  |
| Equity securities | $13617 | $11668 | $1949 | $*-* |
| Placement units and warrants | 33223 | 41 | 33182 | *-* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Corporate bonds and redeemable preferred stock | 520 | *-* | 520 | *-* |
| Notes receivable | 2242 | *-* | 2242 | *-* |
|  | 49602 | $11709 | $37893 | $*-* |
| Investments measured at NAV (1) | 11976 |  |  |  |
| &nbsp;&nbsp;&nbsp; Total other investments, at fair value | $61578 |  |  |  |
| Liabilities |  |  |  |  |
| Trading securities sold, not yet purchased: |  |  |  |  |
| Corporate bonds and redeemable preferred stock | $2764 | $*-* | $2764 | $*-* |
| Derivatives | 13801 | *-* | 13801 | *-* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Equity securities | 9 | 9 |  | *-* |
| U.S. government agency debt securities | 68 | *-* | 68 | *-* |
| U.S. Treasury securities | 21453 | 21453 | *-* | *-* |
| &nbsp;&nbsp;&nbsp; Total trading securities sold, not yet purchased | $38095 | $21462 | $16633 | $*-* |
| Other investments, sold not yet purchased: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Equity derivatives | $11 | $*-* | $11 | $*-* |
| Total other investments sold, not yet purchased | $11 | $- | $11 | $- |

---

(*1*) As a practical expedient, the Company uses NAV (or its equivalent) to measure the fair value of its investments in U.S. Insurance JV, CREO JV, and CK Capital Value Fund. U.S. Insurance JV invests in U.S. Dollar ("USD") denominated debt issued by small insurance and reinsurance companies. CREO JV invests primarily in multi-family commercial real estate mortgage-backed loans. CK Capital Value Fund invests primarily in office buildings in the Netherlands. According to ASC *820,* these investments are *not* categorized within the valuation hierarchy. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *21*

------

[**Table of Contents**](#toc)

FAIR VALUE MEASUREMENTS ON A RECURRING BASIS

 *December 31, 2025*

(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: |  |  |  |  |
| Corporate bonds and redeemable preferred stock | $18449 | $*-* | $18449 | $*-* |
| Derivatives | 4651 | *-* | 4651 | *-* |
| Equity securities | 10424 | 10369 | 55 | *-* |
| Municipal bonds | 3813 | *-* | 3813 | *-* |
| RMBS | 3 | *-* | 3 | *-* |
| SBA loans | 43090 | *-* | 43090 | *-* |
| U.S. government agency MBS and CMOs | 42471 | *-* | 42471 | *-* |
| U.S. government agency debt securities | 17675 | *-* | 17675 | *-* |
| Total investments - trading | $140576 | $10369 | $130207 | $*-* |
| Other investments, at fair value: |  |  |  |  |
| Equity securities | $21457 | $19831 | $1626 | $*-* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Placement units and warrants | 19997 | *-* | 19997 | *-* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Corporate bonds and redeemable preferred stock | 535 | *-* | 535 | *-* |
| Notes receivable | 2783 | *-* | 2783 | *-* |
|  | 44772 | 19831 | 24941 | *-* |
| Investments measured at NAV (1) | 12486 |  |  |  |
| Total other investments, at fair value | $57258 |  |  |  |
| Liabilities |  |  |  |  |
| Trading securities sold, not yet purchased: |  |  |  |  |
| Corporate bonds and redeemable preferred stock | $8107 | $*-* | $8107 | $*-* |
| Derivatives | 4245 | *-* | 4245 | *-* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Equity securities | 463 | 463 | *-* | *-* |
| U.S. Treasury securities | 23802 | 23802 | *-* | *-* |
| &nbsp;&nbsp;&nbsp; Total trading securities sold, not yet purchased | $36617 | $24265 | $12352 | $*-* |

---

(*1*) As a practical expedient, the Company uses NAV (or its equivalent) to measure the fair value of its investments in U.S. Insurance JV and CREO JV. U.S. Insurance JV invests in USD denominated debt issued by small insurance and reinsurance companies. CREO JV invests primarily in multi-family commercial real estate mortgage-backed loans. According to ASC *820,* these investments are *not* categorized within the valuation hierarchy. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *22*

------

[**Table of Contents**](#toc)

The following provides a brief description of the types of financial instruments the Company holds, the methodology for estimating fair value, and the level within the valuation hierarchy of the estimate. The discussion that follows applies regardless of whether the instrument is included in investments-trading; other investments, at fair value; other investments sold, *not* yet purchased; or trading securities sold, *not* yet purchased.

<u>Corporate Bonds and Redeemable Preferred Stock</u>: 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.

<u>Equity Securities</u>: The fair value of equity securities that represent unrestricted investments in publicly traded companies (common or preferred shares, options, warrants, and other equity investments) is determined using the closing price of the security as of the reporting date. These are securities that are traded on a recognized liquid exchange and the Company classifies their fair value within level *1* of the valuation hierarchy.

The fair value of equity securities that represent restricted investments in publicly traded companies is generally valued using a model. The valuation will be considered level *2* if the inputs to the model are observable. Otherwise, it will be considered a level *3* valuation.

<u>Equity Securities Without Readily Determinable Fair Value</u>: 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. These securities are 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. Otherwise, it will be classified as level *2* in the valuation hierarchy.

<u>Notes receivable</u>: Notes receivable includes convertible and non-convertible notes. See note *9.* The Company values these instruments using a model. The main input to these models is the risk-based cash flow discount rates. When the receivable is convertible into counterparty equity, additional inputs include the counterparty's share price, volatility, and the risk-free rate of return. The inputs to this model are observable so the Company classifies these securities within level *2* of the valuation hierarchy.

<u>Foreign Government Bonds</u>: 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.

<u>Municipal Bonds</u>: 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.

<u>Placement Units and Warrants</u>: Placemen<u>t</u> units and warrants represent equity interests in a SPAC that do *not* have redemption rights in the SPAC trust account; so, they *may* become worthless if the SPAC does *not* complete a business combination within its allotted timeframe. The placement units are *not* publicly traded. Upon completion of the SPAC's business combination, the placement units become publicly traded and the Company records them as a component of equity securities until liquidated. Placement units are all valued by a financial model and considered a level *2* valuation. Placement warrants sometimes match the exact terms of the publicly traded warrants of the SPAC (which also do *not* have redemption rights). In those cases, the Company uses the public warrant price to determine fair value. However, because the warrants the Company holds are *not* publicly traded, the Company considers it a level *2* valuation. If the terms of the placement warrants are different from the SPAC's public warrant, the Company will determine fair value using a model and consider it a level *2* or level *3* valuation depending on the observability of the model inputs.

<u>RMBS</u>: The Company generally values these securities using *third* party quotations such as unadjusted broker-dealer quoted prices or market price quotations from *third* party pricing services. These valuations are based on a market approach. The Company generally classifies the fair value of these securities based on *third* party quotations within level *2* of the valuation hierarchy.

<u>SBA Loans</u>: The Company generally values these securities using *third* party quotations such as unadjusted broker-dealer quoted prices, internal valuation models using observable inputs, or market price quotations from *third* party pricing services. The Company generally classifies these investments within level **2* of the valuation hierarchy.

<u>U.S. Government Agency MBS and CMOs</u>: 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>U.S. Government Agency Debt Securities</u>: 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>U.S. Treasury Securities</u>: U.S. Treasury securities include U.S. Treasury bonds and notes, and the fair value of these securities is 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *23*

------

[**Table of Contents**](#toc)

<u>Derivatives</u> 

*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* be settled 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 the fair value of these securities 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. See note *9.*

*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.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *24*

------

[**Table of Contents**](#toc)

*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 *March 31, 2026* and *December 31, 2025*.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *Fair Value March 31, 2026* | *Unfunded Commitments* | *Redemption Frequency* | *Redemption Notice Period* |
| Other investments, at fair value |  |  |  |  |
| CK Capital Value Fund (a) | $1184 | *N/A* | *N/A* | *N/A* |
| CREO JV (b) | 8891 | $7268 | *N/A* | *N/A* |
| U.S. Insurance JV (c) | 1901 | *N/A* | *N/A* | *N/A* |
|  | $11976 |  |  |  |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *Fair Value December 31, 2025* | *Unfunded Commitments* | *Redemption Frequency* | *Redemption Notice Period* |
| Other investments, at fair value |  |  |  |  |
| CK Capital Value Fund (a) | $1171 | *N/A* | *N/A* | *N/A* |
| CREO JV (b) | 8940 | $7268 | *N/A* | *N/A* |
| U.S. Insurance JV (c) | 2375 | *N/A* |  |  |
|  | $12486 |  |  |  |

---

---

| | |
|:---|:---|
| N/A | *Not* Applicable |
| (a) | CK Capital Value Fund invests primarily in office buildings in the Netherlands. |
| (b) | CREO JV invests primarily in multi-family commercial real estate mortgage-backed loans. |
| (c) | U.S. Insurance JV invests in USD denominated debt issued by small and medium size insurance and reinsurance companies.  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *25*

------

[**Table of Contents**](#toc)

***9.* DERIVATIVE FINANCIAL INSTRUMENTS** 

FASB ASC *815, Derivatives and Hedging* ("ASC *815"*), provides for optional hedge accounting. When a derivative is deemed to be a hedge and certain documentation and effectiveness testing requirements are met, reporting entities can record all or a portion of the change in the fair value of a designated hedge as an adjustment to Accumulated Other Comprehensive Income ("AOCI") rather than as a gain or loss in the statements of operations. To date, the Company has *not* designated any derivatives as hedges under the provisions included in ASC *815.*

All of the derivatives that the Company enters into contain master netting arrangements. If certain requirements are met, the offsetting provisions included in FASB ASC *210, Balance Sheet* ("ASC *210"*), allow (but do *not* require) the reporting entity to net the derivative asset and liability on the consolidated balance sheets. It is the Company's policy to present the derivative assets and liabilities on a net basis if the conditions of ASC *210* are met. However, in general, the Company does *not* enter 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 was 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, (iii) the Company's investment in equities, and (iv) the Company's facilitation of mortgage-backed trading. Derivatives entered into by the Company, from time to time, *may* include (a) foreign currency forward contracts, (b) purchase and sale agreements of TBAs and other forward agency MBS contracts, and (c) other extended settlement trades.

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 held at fair value as a component of other investments, at fair value and other investments sold, *not* yet purchased in the Company's consolidated balance sheets. As of *March 31, 2026* and *December 31, 2025*, the Company had call options of $11 and $0, respectively. 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 sheets 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 *March 31, 2026* and *December 31, 2025*, the Company had equity derivatives included in other investments, at fair value of $73 and $73, respectively.

The Company *may* hedge 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*

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.

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 *March 31, 2026*, the Company had open TBAs and other forward MBS purchase agreements in the notional amount of $1,632,350 and open TBAs and other forward MBS sale agreements in the notional amount of $1,648,575. At *December 31, 2025*, the Company had open TBAs and other forward agency MBS purchase agreements in the notional amount of $1,179,500 and open TBAs and other forward agency MBS sale agreements in the notional amount of $1,197,975.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *26*

------

[**Table of Contents**](#toc)

*Other Extended Settlement Trades* 

When the Company buys or sells a financial instrument that will *not* be settled 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 *March 31, 2026* and *December 31, 2025,* the Company had *no* open forward purchase agreements or sales agreements.

*Foreign Currency Forward Contracts*

The Company invests in foreign currency denominated investments that expose it to fluctuations in foreign currency rates, and, therefore, the Company *may,* from time to time, hedge such exposure by using foreign currency forward contracts. The Company carries foreign currency forward contracts at fair value and includes them as a component of other investments, at fair value in the Company's consolidated balance sheets. As of *March 31, 2026* and *December 31, 2025*, the Company had *no* outstanding foreign currency forward contracts.

The following table presents the Company's derivative financial instruments and the amount and location of the fair value (unrealized gain / (loss)) recognized in the consolidated balance sheets as of *March 31, 2026* and *December 31, 2025*.

DERIVATIVE FINANCIAL INSTRUMENTS-BALANCE SHEET INFORMATION

(Dollars in Thousands)

---

| | | | |
|:---|:---|:---|:---|
| Derivative Financial Instruments Not Designated as Hedging Instruments Under FASB ASC 815 | *Balance Sheet Classification* | *March 31, 2026* | *December 31, 2025* |
| TBAs and other forward agency MBS | *Investments-trading* | $14975 | $4651 |
| TBAs and other forward agency MBS | *Trading securities sold, not yet purchased* | (13801) | (4245) |
| Equity derivatives | *Other investments, at fair value* | 33296 | 19997 |
| Equity derivatives | *Other investments sold, not yet purchased, at fair value* | (11) |  |
|  |  | $34459 | $20403 |

---

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 March 31 | Three Months Ended March 31 |
| Derivative Financial Instruments Not Designated as Hedging Instruments Under FASB ASC 815 | Income Statement Classification | 2026 | 2025 |
| TBAs and other forward agency MBS | *Revenue-net trading* | $1191 | $432 |
| Equity derivatives | *Investment banking and new issue* | 9275 |  |
| Equity derivatives | *Principal transactions and other income (loss)* | (7) |  |
|  |  | $*10459* | $*432* |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *27*

------

[**Table of Contents**](#toc)

***10.* COLLATERALIZED SECURITIES TRANSACTIONS** 

*Gestation Repo*

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 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:

<u>On Balance Sheet</u>: 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.

<u>Agency Repo</u>: 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.

*Other Repo Transactions*

In addition to the Company's gestation 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 *March 31, 2026* and *December 31, 2025*, the Company held reverse repos of $359,602 and $357,408, respectively, and the fair value of collateral received under reverse repos was $359,726 and $360,586, respectively.

As of *March 31, 2026* and *December 31, 2025*, the Company held repos of $402,389 and $400,391, respectively, and the fair value of securities and cash pledged as collateral under repos was $406,111 and $407,075, respectively. These amounts include collateral for reverse repos that were re-pledged as collateral for repos.

*Concentration*

In the gestation 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *28*

------

[**Table of Contents**](#toc)

The gestation repo business has been and continues to be concentrated with respect to reverse repurchase counterparties. The Company has repo and reverse repos with limited number of reverse repo counterparties. As of *March 31, 2026* and *December 31, 2025*, the Company's gestation reverse repos shown in the tables below represented balances from *1* and *2* 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 gestation repo business (net interest margin and fee revenue) was $5,885 and $4,179 for the *three* months ended *March 31, 2026* and *2025*, 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 collateral, if applicable, on a gross basis even if the underlying netting conditions are met. The amounts in the table below are presented on a gross basis.

The following tables summarize the remaining contractual maturity of the gross obligations under repos accounted for as secured borrowings segregated by the underlying collateral pledged as of each date shown. All amounts as well as counterparty cash collateral (see note *13*) are subject to master netting arrangements.

SECURED BORROWINGS

(Dollars in Thousands)

 *March 31, 2026*

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | *Repurchase Agreements* | *Repurchase Agreements* | *Repurchase Agreements* | *Repurchase Agreements* | *Repurchase Agreements* |
|  | *Remaining Contractual Maturity of the Agreements* | *Remaining Contractual Maturity of the Agreements* | *Remaining Contractual Maturity of the Agreements* | *Remaining Contractual Maturity of the 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) | $- | $359536 | $- | $- | $359536 |
| SBA loans | 42853 |  |  |  | 42853 |
|  | $42853 | $359536 | $- | $- | $402389 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | *Reverse Repurchase Agreements* | *Reverse Repurchase Agreements* | *Reverse Repurchase Agreements* | *Reverse Repurchase Agreements* | *Reverse Repurchase Agreements* |
|  | *Remaining Contractual Maturity of the Agreements* | *Remaining Contractual Maturity of the Agreements* | *Remaining Contractual Maturity of the Agreements* | *Remaining Contractual Maturity of the 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) | $- | $359602 | $- | $- | $359602 |
|  | $- | $359602 | $- | $- | $359602 |

---

The weighted average interest rate of the repurchase agreements outstanding as of *March 31, 2026* was 4.41%. The weighted average interest rate of the reverse repurchase agreements outstanding as of *March 31, 2026* was 4.83%.

SECURED BORROWINGS

(Dollars in Thousands)

 *December 31, 2025*

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | *Repurchase Agreements* | *Repurchase Agreements* | *Repurchase Agreements* | *Repurchase Agreements* | *Repurchase Agreements* |
|  | *Remaining Contractual Maturity of the Agreements* | *Remaining Contractual Maturity of the Agreements* | *Remaining Contractual Maturity of the Agreements* | *Remaining Contractual Maturity of the 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) | $- | $357322 | $- | $- | $357322 |
| SBA loans | 43069 |  |  |  | $43069 |
|  | $43069 | $357322 | $- | $- | $400391 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | *Reverse Repurchase Agreements* | *Reverse Repurchase Agreements* | *Reverse Repurchase Agreements* | *Reverse Repurchase Agreements* | *Reverse Repurchase Agreements* |
|  | *Remaining Contractual Maturity of the Agreements* | *Remaining Contractual Maturity of the Agreements* | *Remaining Contractual Maturity of the Agreements* | *Remaining Contractual Maturity of the 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) | $- | $357408 | $- | $- | $357408 |
|  | $- | $357408 | $- | $- | $357408 |

---

The weighted average interest rate of the repurchase agreements outstanding as of *December 31, 2025* was 4.47%. The weighted average interest rate of the reverse repurchase agreements outstanding as of *December 31, 2025* was 4.98%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *29*

------

[**Table of Contents**](#toc)

***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 *23.*

The following table summarizes the activity and earnings in the Company's investments that are accounted for under the equity method.

INVESTMENTS IN EQUITY METHOD AFFILIATES

(Dollars in Thousands)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *Dutch Real Estate Entities* | *Columbus Circle II SPAC* | *SPAC Sponsor Entities and Other* | *Total* |
| January 1, 2026 | $5739 | $- | $922 | $6661 |
| Investments / advances | 2809 | 3666 |  | 6475 |
| Distributions / repayments |  |  |  |  |
| Reclasses to (from) |  |  | (1351) | (1351) |
| Earnings / (loss) recognized | (283) | (698) | 454 | (527) |
| March 31, 2026 | $8265 | $2968 | $25 | $11258 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *Dutch Real Estate Entities* | *Columbus Circle SPAC* | *SPAC Sponsor Entities and Other* | *Total* |
| January 1, 2025 | $5105 | $- | $18325 | $23430 |
| Investments / advances |  | 3467 |  | 3467 |
| Distributions / repayments |  |  | (1587) | (1587) |
| Reclasses to (from) |  |  | (1886) | (1886) |
| Earnings / (loss) recognized | 634 | (3467) | (13930) | (16763) |
| December 31, 2025 | $5739 | $- | $922 | $6661 |

---

Dutch Real Estate Entities include: (i) Amersfoort 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.*

The investments in the Columbus Circle II SPAC and the Columbus Circle SPAC represent the Company's total investment in Columbus Circle II SPAC and Columbus Circle SPAC, which includes the non-controlling investment of the related sponsor.

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 or from SPAC sponsor entities that have completed business combinations but have *not* yet distributed shares to sponsor investors and other equity method investments. 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.

The following tables provide summary information regarding the Company's equity method investees:

---

| | | |
|:---|:---|:---|
|  | March 31, 2026 | December 31, 2025 |
| Total Assets | $672533 | $494662 |
| Liabilities | $133618 | $194512 |
| Equity allocable to the controlling interest | 538790 | 300025 |
| Noncontrolling interest | 125 | 125 |
| Total Equity | 538915 | 300150 |
| Total Liabilities & Equity | $672533 | $494662 |

---

---

| | | |
|:---|:---|:---|
|  | Three months ending | Three months ending |
|  | March 31, | March 31, |
|  | 2026 | 2025 |
| Net income/(loss) | $884 | $3089 |
| Net income/(loss) attributable to the investee | $884 | $3089 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *30*

------

[**Table of Contents**](#toc)

***12.* LEASES**

The Company leases office space and certain computers and related equipment. 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 *March 31, 2026*, all of the leases to which the Company was a party were operating leases. The weighted average remaining term of the leases was 8.0 years. The weighted average discount rate for the leases was 6.05%.

Maturities of operating lease liability payments consisted of the following.

FUTURE MATURITY OF LEASE LIABILITIES

(Dollars in Thousands)

---

| | |
|:---|:---|
|  | *March 31, 2026* |
| 2026 - remaining | $2231 |
| 2027 | 3015 |
| 2028 | 2928 |
| 2029 | 2534 |
| 2030 | 2099 |
| Thereafter | 8516 |
| Total | 21323 |
| Less imputed interest | (4568) |
| Lease obligation | $16755 |

---

During the *three* months ended *March 31, 2026* and *2025*, total cash payments of $723 and $361, respectively, were recorded as a reduction in the operating lease obligation. *No* cash payments were made to acquire right of use assets.

For the *three* months ended *March 31, 2026* and *2025*, rent expense, net of sublease income of $23 and $23, respectively, was $695 and $654, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *31*

------

[**Table of Contents**](#toc)

***13.* OTHER RECEIVABLES, OTHER ASSETS, ACCOUNTS PAYABLE AND OTHER LIABILITIES, AND ACCRUED COMPENSATION**

Other receivables consisted of the following.

OTHER RECEIVABLES

(Dollars in Thousands)

---

| | | |
|:---|:---|:---|
|  | *March 31, 2026* | *December 31, 2025* |
| Investment banking and new issue receivable | $1575 | $3625 |
| &nbsp;&nbsp;&nbsp; Allowance for credit losses | (1000) | (1000) |
| Investment banking and new issue, net | 575 | 2625 |
| Asset management fees receivable | 4348 | 3619 |
| Accrued interest receivable | 972 | 977 |
| Cash collateral due from counterparties | 5538 |  |
| Revenue share receivable | 263 |  |
| Agency repo income receivable | 909 | 853 |
| Miscellaneous other receivables | 233 | 822 |
| Other receivables | $12838 | $8896 |

---

Investment banking and new issue fees receivable represent amounts owed to Cohen Securities from various counterparties for services rendered. Investment banking and new issue revenue is recognized when the Company's performance obligations have been satisfied, and collectability is reasonably assured. However, in certain cases, collectability becomes doubtful at a later date. At each reporting period, the Company assesses the collectability of its investment banking and new issue receivables. Each receivable is unique and does *not* share similar characteristics to be pooled so they are evaluated on an individual basis. The Company records an allowance when, in management's judgement, *one* is necessary for credit losses. The provision for credit losses is included as a component of professional fees and other operating expenses in the statement of operations. It is the Company's policy to fully write off the receivable and related allowance when it has abandoned collection efforts. For the *three* months ended *March 31, 2026,* no additional provision was recorded, and no receivable was written off.

Asset management fees receivable is of a routine and short-term nature. These amounts are generally accrued monthly and paid on a monthly or quarterly basis. Accrued interest and dividends receivable represents interest and dividends accrued on the Company's investment securities included as a component of investments-trading or other investments, at fair value. Interest payable on securities sold, *not* yet purchased is included as a component of accounts payable and other liabilities in the table titled accounts payable and other liabilities below. Cash collateral due from counterparties represents cash the Company posted with counterparties generally for TBA contracts, repurchase transactions, or other derivative transactions. 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)

---

| | | |
|:---|:---|:---|
|  | *March 31, 2026* | *December 31, 2025* |
| Deferred costs | $74 | $297 |
| Prepaid expenses | 2222 | 2116 |
| Deposits | 711 | 704 |
| Furniture, equipment, and leasehold improvements, net | 2630 | 2505 |
| Intangible assets | 166 | 166 |
| Other assets | $5803 | $5788 |

---

Deferred costs are costs incurred pending reimbursement from a *third* party upon closing of a transaction. 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, 2025* for further discussion of the Company's furniture, equipment, and leasehold improvements. Intangible assets represent the carrying value of the Cohen Securities broker-dealer license.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *32*

------

[**Table of Contents**](#toc)

Accounts payable and other liabilities consisted of the following.

ACCOUNTS PAYABLE AND OTHER LIABILITIES

(Dollars in Thousands)

---

| | | |
|:---|:---|:---|
|  | *March 31, 2026* | *December 31, 2025* |
| Accounts payable | $843 | $704 |
| Accrued income tax | 241 | 1248 |
| Accrued interest payable | 383 | 535 |
| Accrued interest on securities sold, not yet purchased | 171 | 222 |
| Payroll taxes payable | 2895 | 4733 |
| Accrued dividends and distributions | 9725 | 6695 |
| Accrued expense and other liabilities | 2480 | 3807 |
| Accounts payable and other liabilities | $16738 | $17944 |

---

ACCRUED COMPENSATION

(Dollars in Thousands)

---

| | | |
|:---|:---|:---|
|  | *March 31, 2026* | *December 31, 2025* |
| Non-cash incentive compensation payable | $24592 | $18467 |
| Executive deferred compensation | 7850 | 7680 |
| Other compensation | 23398 | 66542 |
| Accrued compensation | $55840 | $92689 |

---

Non-cash incentive compensation payable is the amount of accrued bonus that relates to the carry value of the Company's financial instruments that are reported on Company's consolidated balance sheets. These amounts are due to the employee when the related other investment, at fair value is sold by the Company. Executive deferred compensation represents compensation that the Company has agreed to pay executive management over a fixed period of time. Accrued compensation represents normal employee salary compensation and other incentive compensation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *33*

------

[**Table of Contents**](#toc)

***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)

---

| | | |
|:---|:---|:---|
|  | *March 31, 2026* | *December 31, 2025* |
| Cash and cash equivalents | $6 | $6 |
| Other investments, at fair value | 664 | 142 |
| Investment in equity method affiliates | 2091 | 896 |
| Non-controlling interest | (2382) | (434) |
| Investment in consolidated VIEs | $379 | $610 |

---

The maximum potential loss the Company could incur related to the consolidated VIEs is the investment in consolidated VIEs shown in the table above.

*The Company's Principal Investing Portfolio*

Included in other investments, at fair value and investment in equity method affiliates in the consolidated balance sheets are investments in several VIEs. In each case, the Company determined it was *not* the primary beneficiary. The maximum potential financial statement loss the Company would incur if the VIEs were to default on all their obligations would be the loss of the carrying value of these investments as well as any future investments the Company were to make. As of *March 31, 2026* and *December 31, 2025*, there were $7,268 and $7,268, respectively, of unfunded commitments to VIEs in which the Company had invested. The total amount of working capital commitment was $1,500 and $0 as of *March 31, 2026* and *December 31, 2025,* respectively. Other than its investment in these entities, the Company did *not* provide financial support to these VIEs during the *three* months ended *March 31, 2026* and *2025* and had no liabilities, contingent liabilities, or guarantees (implicit or explicit) related to these VIEs at *March 31, 2026* and *December 31, 2025*. See the 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 the 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 *15*) and (ii) any security that represents an interest in a VIE that is included in investments-trading or securities sold, *not* yet purchased in the Company's consolidated balance sheets. The table below shows the Company's maximum exposure to loss associated with these identified nonconsolidated VIEs in which it holds variable interests at *March 31, 2026* and *December 31, 2025*.

CARRYING VALUE OF VARIABLE INTERESTS IN NON-CONSOLIDATED VARIABLE INTEREST ENTITIES

(Dollars in Thousands)

---

| | | |
|:---|:---|:---|
|  | *March 31, 2026* | *December 31, 2025* |
| Other investments, at fair value | $11976 | $12486 |
| Investments in equity method affiliates | 26 | 27 |
| Maximum exposure | $12002 | $12513 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *34*

------

[**Table of Contents**](#toc) &nbsp;&nbsp;&nbsp;&nbsp;

***15.* DEBT**

The Company had the following debt outstanding.

DETAIL OF DEBT

(Dollars in Thousands)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | *As of March 31, 2026* | *As of December 31, 2025* | *Interest Rate Terms* | *Interest (2)* | *Maturity* |
| Description |  |  |  |  |  |
| Non-convertible debt: |  |  |  |  |  |
| 12.00% senior note (the "2024 Note") | $2573 | $2573 | *Fixed* | 12.00% | *August 2026* |
| 12.00% senior note (the "2020 Note") |  | 4500 | *Fixed* | 12.00% | *January 2026* |
|  | 2573 | 7073 |  |  |  |
| Junior subordinated notes: (1) |  |  |  |  |  |
| Alesco Capital Trust I | 28125 | 28125 | *Variable* | 7.93% | *July 2037* |
| Sunset Financial Statutory Trust I | 20000 | 20000 | *Variable* | 8.11% | *March 2035* |
| Less unamortized discount | (22108) | (22303) |  |  |  |
|  | 26017 | 25822 |  |  |  |
| Byline Credit Facility |  |  | *Variable* | *NA* | *June 2026* |
| Total | $28590 | $32895 |  |  |  |

---

(*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 *March 31, 2026* on a combined basis was 18.88% 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. 

*The *2024* Note*

On *September 1, 2024,* the Operating LLC issued to JKD Investor the *2024* Note, which evidences the Operating LLC's obligation to repay to the JKD Investor the original principal amount of $5,146. Pursuant to the *2024* Note, the unpaid principal amount and all accrued but unpaid interest thereunder would be due and payable as follows: (i) $2,573 of the principal amount would be due and payable on *August 31, 2025* and (ii) $2,573 would be due and payable on *August 31, 2026.* The *2024* 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, 2025,* without the prior written consent of the holder and without penalty or premium. The Company prepaid the $2,573 of the principal amount otherwise due under the *2024* Note on *August 31, 2025* on *June 30, 2025.* 

The *2024* Note accrues interest on the unpaid principal amount from *September 1, 2024* until maturity at a rate equal to 12% per year. Interest on the *2024* Note is payable in cash quarterly on each *January 1, April 1, July 1,* and *October 1,* and commenced on *October 1, 2024.* Under the *2024* 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 *2024* Note and for so long as such Event of Default continues, all principal, interest, and other amounts payable under the *2024* Note will bear interest at a rate equal to 13% per year.

The *2024* 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 *2024* Note) of the Operating LLC outstanding as of and issued following *September 1, 2024.* Pursuant to the *2024* Note, following *September 1, 2024,* the Operating LLC *may not* incur any Indebtedness that is a senior obligation to the *2024* Note. See notes *4.*

*The *2020* Note*

On *January 5, 2024,* the Operating LLC and JKD Investor entered into an amendment to the *2020* Note, pursuant to which the *2020* Note was amended to (a) extend (i) the maturity date thereof from *January 31, 2024* to *January 31, 2026, (*ii) the date following which the *2020* Note *may* be redeemed by JKD Investor from *January 31, 2023* to *January 31, 2025,* and (iii) the date following which the *2020* Note *may* be prepaid by the Operating LLC from *January 31, 2023* to *January 31, 2025;* and (b) increase the interest rate payable under the *2020* Note from 10% per annum to 12% per annum effective as of *January 31, 2024.* On *January 31, 2026,* the Company paid all accrued interest and principal due and payable under the *2020* Note and the *2020* Note was cancelled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *35*

------

[**Table of Contents**](#toc)

*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.* <u>Alesco Capital Trust I</u>: $28,995 in aggregate principal amount issued in *June 2007.* The notes mature on *July 30, 2037* and *may* be called by the Company at any time. While LIBOR was still being published, the notes accrued interest payable quarterly at a floating interest rate equal to *90*-day LIBOR plus 400 basis points per annum. LIBOR ceased being published effective *June 30, 2023.* Subsequent to LIBOR *no* longer being published, the notes accrue interest at the *90*-day standard overnight financing rate plus a tenor spread adjustment of 0.26161% ("Term SOFR") plus 400 basis points per annum. All principal is due at maturity. Alesco Capital Trust I simultaneously issued 870 shares of Alesco Capital Trust I's common securities to the Company for a purchase price of $870, which constitutes all of the issued and outstanding common securities of Alesco Capital Trust I.

*2.* <u>Sunset Financial Statutory Trust I (</u><u>"</u><u>Sunset Financial Trust</u><u>"</u><u>)</u>: $20,619 in aggregate principal amount issued in *March 2005.* The notes mature on *March 30, 2035.* While LIBOR was still being published, the notes accrued interest payable quarterly at a floating rate of interest of *90*-day LIBOR plus 415 basis points. Subsequent to LIBOR *no* longer being published, the notes accrue interest at Term SOFR plus 415 basis points per annum. 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 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 the 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *36*

------

[**Table of Contents**](#toc)

*Byline Credit Facility* 

On *October 28, 2020,* the Company entered into an unsecured line of credit with Byline Bank, as lender, and Cohen Securities, as borrower (the "Byline Credit Facility"). From *October 28, 2020* to *June 2025,* the Company and Byline Bank have entered into several amendments that changed the terms such as: (i) interest rate, (ii) total line of credit, (iii) financial covenants, and (iv) maturity dates. During that period, the Company complied with all financial covenants and all payment terms of the Byline Credit Facility and there were *no* defaults or events of default thereunder during the period.

As of *March 31, 2026,* the Byline Credit Facility consisted of a single $15,000 unsecured line of credit under which Cohen Securities is the borrower, which is guaranteed by the Company, the Operating LLC, Cohen Securities Holdings, and Cohen Securities. Effective as of *June 18, 2025,* the Operating LLC and Byline Bank entered into the Third Amendment to Third Amended and Restated Loan Agreement, pursuant to which (i) both the maturity date and the final date that loans can be made under the Byline Credit Facility were extended from *June 18, 2025* to *June 18, 2026* and (ii) the amount of Excess Net Capital that Cohen Securities must maintain was reduced from $40,000 to $30,000.

Loans under the Byline Credit Facility bear interest at a per annum rate equal to Term SOFR plus 6.0%, provided that in *no* event can the interest rate be less than 7.0%. The Company is required to pay on a quarterly basis an undrawn commitment fee at a per annum rate equal to 0.50% of the undrawn portion of Byline Bank's *$15,000* commitment under the Byline Credit Facility.

The Company is also required to pay on each anniversary a commitment fee at a per annum rate equal to 0.50% of the $15,000 commitment under the Byline Credit Facility. Loans under the Byline Credit Facility must be used by the Company for working capital purposes and general liquidity. The Company *may* request a reduction in Byline Bank's *$15,000* commitment in a minimum amount of $1,000 and multiples of $500 thereafter upon *not* less than *five* days' prior notice to Byline Bank. The Company *may* draw on the facility until *June 18, 2026.* Loans (both principal and interest) made by Byline Bank under the amended and restated agreement are scheduled to mature and become immediately due and payable in full on *June 18, 2026.*

The Company is subject to the following financial covenants in the Byline Credit Facility. As of *March 31, 2026* and *December 31, 2025*, the Company was in compliance with all of the following financial covenants.

*1.* Cohen Securities' tangible net worth as defined must exceed $70,000;

*2.* Cohen Securities' excess net capital as defined in Rule *15c3*-*1* of the Exchange Act must exceed $30,000; and

*3.* The total amount drawn on the facility must *not* exceed 25% of Cohen Securities' tangible net worth as defined.

As of *March 31, 2026* and *December 31, 2025*, no amounts were outstanding under the Byline Credit Facility, and the Company was in compliance with all financial covenants thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;

*Interest Expense, net*

INTEREST EXPENSE

(Dollars in Thousands)

---

| | | |
|:---|:---|:---|
|  | Three Months Ended March 31, | Three Months Ended March 31, |
|  | 2026 | 2025 |
| Junior subordinated notes | $1170 | $1144 |
| 2020/2024 Notes | 121 | 286 |
| Byline Credit Facility | 44 | 18 |
|  | $*1335* | $*1448* |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *37*

------

[**Table of Contents**](#toc)

***16.* EQUITY**

*Stockholders' Equity*

<u>Common Equity</u>: The following table reflects the activity for the *three* months ended *March 31, 2026* related to the number of shares of unrestricted Common Stock that the Company had issued.

---

| | |
|:---|:---|
|  | *Common Stock* |
|  | *Shares* |
| December 31, 2025 | 1750055 |
| Issuance of shares | 36708 |
| Vesting of shares | 135251 |
| Shares withheld for employee taxes and retired | (34141) |
| March 31, 2026 | 1887873 |

---

<u>Series E Voting Non-Convertible Preferred Stock</u>: 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 executive chairman, is the sole holder of all 4,983,557 shares of Series E Preferred Stock issued and outstanding as of *March 31, 2026*. 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, 2025*.

<u>Series F Voting Non-Convertible Preferred Stock</u>: 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 shares of Series F Preferred Stock to Daniel G. Cohen and 9,880,268 shares of 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 *March 31, 2026*, 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, 2025*.

*Cash Dividends* 

On *March 6, 2026,* the Company's board of directors declared a quarterly cash dividend of $0.25 per share and a special dividend of $0.70 per share on its Common Stock, both payable on *April 3, 2026* to shareholders of record as of *March 20, 2026.* On *March 10, 2025,* 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 9, 2025* to stockholders of record on *March 26, 2025.* 

During the *three* months ended *March 31, 2026*, Cohen & Company Inc. received and surrendered units of the Operating LLC. The following table displays the number of units received (net of surrenders) by Cohen & Company Inc.

---

| | |
|:---|:---|
|  | *Three Months Ended* |
|  | *March 31, 2026* |
| Issuance of shares | 367080 |
| Issuance as equity-based compensation | 1011100 |
| Total | 1378180 |

---

The Company recognized a net increase in additional paid in capital of $516 and a net decrease in AOCI of $7 with an offsetting decrease in non-controlling interest of $509 in connection with the acquisition and surrender of additional units of the Operating LLC during the *three* months ended *March 31, 2026*. The following schedule presents the effects of changes in Cohen & Company Inc.'s ownership interest in the Operating LLC on the equity attributable to Cohen & Company Inc. for the *three* months ended *March 31, 2026* and *2025*.

---

| | | |
|:---|:---|:---|
|  | *Three Months Ended March 31,* | *Three Months Ended March 31,* |
|  | *2026* | *2025* |
| Net income / (loss) attributable to Cohen & Company Inc. | $1492 | $329 |
| Increase / (decrease) in Cohen & Company Inc. paid in capital for the acquisition / (surrender) of additional units in consolidated subsidiary, net | 516 | 502 |
| Changes from net income / (loss) attributable to Cohen & Company Inc. and transfers (to) from the non-controlling interest | $2008 | $831 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *38*

------

[**Table of Contents**](#toc)

*Equity Distribution Agreement*

On *February 20, 2026,* the Company entered into an Equity Distribution Agreement with Northland Securities, Inc. (trade name Northland Capital Markets) ("Northland") and CCS, as sales agents (CCS and Northland, together, the "Sales Agents"), relating to the issuance and sale from time to time by the Company (the "ATM Program"), through the Sales Agents, of shares of the Company's Common Stock having an aggregate offering price of up to $75,000 (the "Shares"). Sales of the Shares, if any, under the Equity Distribution Agreement will be made in sales deemed to be "at-the-market offerings" as defined in Rule *415* under the Securities Act, as agreed with the Sales Agents. In accordance with the applicable rules of the SEC, as of the date of this Current Report on Form *10*-Q, the Company *may* sell an aggregate of up to $13,094 in Shares under the Equity Distribution Agreement.

The Equity Distribution Agreement includes customary representations, warranties and covenants by the Company and customary obligations of the parties and termination provisions. The Company has agreed to indemnify the Sales Agents against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the Sales Agents *may* be required to make with respect to any of those liabilities. The Company will pay each Sales Agent a commission of 2.5% of the gross offering proceeds of the Shares sold through such Sales Agent pursuant to the Equity Distribution Agreement.

The offering of the Company's Common Stock pursuant to the Equity Distribution Agreement will terminate upon the sale of all of the Shares pursuant to the Equity Distribution Agreement, unless sooner terminated in accordance with the terms and conditions of the Equity Distribution Agreement.

During the *three* months ended *March 31, 2026,* the Company sold 36,708 shares of Common Stock in the open market pursuant to the Equity Distribution Agreement for a total net sale price of $614.

*Detail of Non-Controlling Interest* 

The Company has *two* major categories of non-controlling interest. Convertible non-controlling interest represents the portion of the Operating LLC *not* owned by the Company. The convertible non-controlling interest is exchangeable in certain circumstances into Common Stock. Non-convertible non-controlling interest represents the portion of various subsidiaries of the Operating LLC that are *not* owned by the Operating LLC. The non-convertible non-controlling interest is *not* exchangeable into Common Stock.

ROLLFORWARD OF NON-CONTROLLING INTERESTS

(Dollars in Thousands)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | *Operating LLC* | *Columbus Circle II SPAC* | *Other Consolidated Subsidiaries* | *Total* |
| December 31, 2025 | $51568 | $- | $438 | $52006 |
| Non-controlling interest share of income (loss) | 2679 | (584) | (134) | 1961 |
| Other comprehensive (loss) | (55) |  |  | (55) |
| Acquisition / (surrender) of additional units of consolidated subsidiary | (509) |  |  | (509) |
| Equity-based compensation | 894 |  |  | 894 |
| Shares withheld for employee taxes | (443) |  |  | (443) |
| Distributions to convertible non-controlling interest of Cohen & Company Inc. | (6016) |  |  | (6016) |
| Redemption of convertible non-controlling interest units | (1883) |  |  | (1883) |
| Non-convertible non-controlling interest contributions |  | 2666 |  | 2666 |
| March 31, 2026 | $46235 | $2082 | $304 | $48621 |

---

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 *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, 2025*, for a discussion of the Company's non-controlling interests.

*Partial redemption of convertible non-controlling interests*

On *February 3, 2026,* Daniel G. Cohen, the Company's executive chairman, redeemed 463,915 units of membership in the Operating LLC ("LLC Units") for which the Company paid to Mr. Cohen an aggregate of $905, or $1.951 per LLC Unit. These 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, 2026,* of 1,011,000 restricted LLC Units, which had been previously granted to Mr. Cohen under the *2020* Long-Term Incentive Plan. On *February 5, 2025,* Daniel G. Cohen redeemed 460,679 LLC Units for which the Company paid to Mr. Cohen an aggregate of $457, or $0.991 per LLC Unit. The LLC Units were redeemed by Mr. Cohen in order to fund certain tax liabilities incurred by Mr. Cohen in connection with the vesting on *January 31, 2025* of 1,011,000 restricted LLC Units that had been previously granted to Mr. Cohen under the *2020* Long-Term Incentive Plan.

On *February 3, 2026,* Lester Brafman, the Company's chief executive officer, redeemed 501,455 LLC Units for which the Company paid to Mr. Brafman an aggregate of $978, or $1.951 per LLC Unit. These LLC Units were redeemed by Mr. Brafman in order to fund certain tax liabilities incurred by Mr. Brafman in connection with the vesting, on *January 31, 2026,* of 611,000 restricted LLC Units and 40,000 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. On *February 5, 2025,* Lester Brafman redeemed 502,053 LLC Units for which the Company paid to Mr. Brafman an aggregate of $498, or $0.991 per LLC Unit. The LLC Units were redeemed by Mr. Brafman in order to fund certain tax liabilities incurred by Mr. Brafman in connection with the vesting, on *January 31, 2025,* of 610,996 restricted LLC Units and 40,000 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *39*

------

[**Table of Contents**](#toc)

***17.* 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 *three* months ended *March 31, 2026*, Cohen & Company Inc. owned 30.4% 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 69.6% 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 NOL and 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 Three Months Ended March 31,* | *For the Three Months Ended March 31,* | *For the Three Months Ended March 31,* |
|  | *2026* | *2025* | *Change* |
| Current | $(182) | $54 | $236 |
| Deferred |  | 85 | 85 |
| Total | $(182) | $139 | $321 |

---

The One Big Beautiful Bill Act ("OBBBA") was enacted on *July 4, 2025.* The only provisions of OBBBA that directly impact the Company are: (i) changes in bonus depreciation and (ii) changes in the calculation of the amount of net interest expense that is deductible. In both cases, the impact to the Company will be immaterial. OBBBA made significant changes to individual income taxes including the taxation of overtime and tips that *may* impact certain company's workforces thereby having an indirect effect on these companies. However, *none* of the Company's employees receive tips and the Company has an immaterial number of hourly employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *40*

------

[**Table of Contents**](#toc)

***18.* NET CAPITAL REQUIREMENTS** 

Cohen Securities is subject to the net capital provision of Rule *15c3*-*1* under the Exchange Act, which requires the maintenance of minimum net capital, as defined therein. As of *March 31, 2026*, Cohen Securities' minimum required net capital was $250, and actual net capital was $69,946, which exceeded the minimum requirements by $69,696. CCFESA, a subsidiary of the Company, is regulated by the ACPR in France. CCFESA is subject to certain regulatory capital requirements in accordance with Articles *L.533*-*2* *et seq.* of the French Financial and Monetary Code, implementing the new framework set out in the Investment Firm Regulation ("IFR") and the Investment Firm Directive ("IFD"). As of *March 31, 2026*, the total minimum required net liquid capital was $701 and actual net liquid capital in CCFESA was $3,325, which exceeded the minimum requirement by $2,624.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *41*

------

[**Table of Contents**](#toc)

***19*. EARNINGS / (LOSS) PER COMMON SHARE**

The following table presents a reconciliation of basic and diluted earnings / (loss) per common share for the periods indicated.

EARNINGS / (LOSS) PER COMMON SHARE

(Dollars in Thousands, except share or per share information)

---

| | | |
|:---|:---|:---|
|  | *Three Months Ended March 31,* | *Three Months Ended March 31,* |
|  | *2026* | *2025* |
| Net income / (loss) attributable to Cohen & Company Inc. | $1492 | $329 |
| Add: Net income (loss) attributable to the convertible non-controlling interest of Cohen & Company Inc. (1) | 2679 | 782 |
| Add / (deduct): Adjustment (2) | (1592) | 2 |
| Net income / (loss) on a fully converted basis | $2579 | $1113 |
| Weighted average common shares outstanding - Basic | 1824193 | 1704510 |
| Unrestricted LLC Units exchangeable into Cohen & Company Inc. shares (1) | 4172198 | 4061322 |
| Restricted units or shares | 108130 | 42462 |
| Weighted average common shares outstanding - Diluted (3) | 6104521 | 5808294 |
| Net income / (loss) per common share - Basic | $0.82 | $0.19 |
| Net income / (loss) per common share - Diluted | $0.42 | $0.19 |

---

(*1*) The units of membership interests in the Operating LLC ("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*) All potentially dilutive securities were included in the diluted per share calculations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *42*

------

[**Table of Contents**](#toc)

***20.* 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *43*

------

[**Table of Contents**](#toc)

***21.* SEGMENT AND GEOGRAPHIC INFORMATION** 

The Company operates within three business segments: Capital Markets, Asset Management, and Principal Investing. See note *1.* The Company's chief executive officer is the chief operating decision-maker ("CODM") and is responsible for allocating resources and assessing the performance of the business segments. The CODM relies on enterprise net income / (loss) to allocate resources because it provides insight into profitability for the entire enterprise including the convertible non-controlling interest but excluding non-convertible non-controlling interest. The CODM uses enterprise net income / (loss) in the annual budgeting and forecasting process. The CODM considers budget to actual variances on a monthly basis when making allocation decisions.

The Company's business segment information was prepared in a manner consistent with the internal reporting provided to the CODM and represents the information that is relied upon by management in its decision-making processes. Revenues and expenses directly associated with each business segment are included in determining net income / (loss) by segment.

The Company presents principal transactions gains and losses that relate to financial instruments that the Company received through CCM's activities as part of the Capital Markets segment with all other principal transactions gains and losses included in the Principal Investing segment. The CODM evaluates the performance of the Capital Markets segment including the gains and losses on the financial instruments received through CCM's activities.&nbsp;&nbsp;&nbsp;&nbsp;

Interest expense in the table below includes non-operating interest expense. Interest income and expense relating to operations is included in net trading revenue. See note *5.* 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. See (*1*) below.

The following table sets forth the Company's segment information of revenue, expenses, and income (loss) from operations.

SEGMENT INFORMATION

Statement of Operations Information

Three Months Ended *March 31, 2026*

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | *Capital* | *Asset* |  | *Principal* | *Segment* | *Unallocated* |  |
|  | *Markets* | *Management* |  | *Investing* | *Total* | *(1)* | *Total* |
| Investment banking and new issue | $45711 | $- |  | $- | $45711 | $- | $45711 |
| Net trading | 13200 |  |  |  | 13200 |  | 13200 |
| Asset management |  | 2419 |  |  | 2419 |  | 2419 |
| Principal transactions |  |  |  | (3915) | (3915) |  | (3915) |
| Other income |  | 290 |  | 197 | 487 |  | 487 |
| Total revenues | 58911 | 2709 |  | (3718) | 57902 |  | 57902 |
| Compensation | 35842 | 1817 |  | 30 | 37689 | 3618 | 41307 |
| Business development | 930 | 97 |  |  | 1027 | 230 | 1257 |
| Occupancy and equipment | 793 | 57 |  |  | 850 | 276 | 1126 |
| Subscriptions, clearing, and execution | 3799 | 93 |  |  | 3892 | 60 | 3952 |
| Professional fee and other operating | 2822 | 465 |  | 14 | 3301 | 1623 | 4924 |
| Depreciation and amortization |  | 2 |  |  | 2 | 201 | 203 |
| Total operating expenses | 44186 | 2531 |  | 44 | 46761 | 6008 | 52769 |
| Operating income (loss) | 14725 | 178 |  | (3762) | 11141 | (6008) | 5133 |
| Interest expense | (44) |  |  |  | (44) | (1291) | (1335) |
| Income (loss) from equity method affiliates |  |  |  | (527) | (527) |  | (527) |
| Income (loss) before income taxes | 14681 | 178 |  | (4289) | 10570 | (7299) | 3271 |
| Income tax expense (benefit) |  | 65 |  |  | 65 | (247) | (182) |
| Net income (loss) | 14681 | 113 |  | (4289) | 10505 | (7052) | 3453 |
| Less: Net income (loss) attributable to the non-convertible non-controlling interest of the Operating LLC |  |  |  | (718) | (718) |  | (718) |
| Enterprise net income (loss) | 14681 | 113 |  | (3571) | 11223 | (7052) | 4171 |
| Less: Net income (loss) attributable to the convertible non-controlling interest of Cohen & Company Inc. |  |  |  |  |  | 2679 | 2679 |
| Net income (loss) attributable to Cohen & Company Inc. | $14681 | $113 |  | $(3571) | $11223 | $(9731) | $1492 |
| *<u>Other statement of operations data</u>* |  |  | |  |  |  |  |
| Compensation as a percentage of revenue | 60.84 | 67.07 | % | (0.81) | 65.09 | *N/A* | 71.34 |
| Operating income / (loss) as a percentage of revenue | 25.00 | 6.57 | % | 101.18 | 19.24 | *N/A* | 8.86 |
| Net income / (loss) as a percentage of revenue | 24.92 | 4.17 | % | 115.36 | 18.14 | *N/A* | 5.96 |
| Net income / (loss) attributable to Cohen & Company Inc. as a percentage of revenue | 24.92 | 4.17 | % | 96.05 | 19.38 | *N/A* | 2.58 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *44*

------

[**Table of Contents**](#toc)

SEGMENT INFORMATION

Statement of Operations Information

Three Months Ended *March 31, 2025*

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | *Capital* | *Asset* |  | *Principal* | *Segment* | *Unallocated* |  |
|  | *Markets* | *Management* |  | *Investing* | *Total* | *(1)* | *Total* |
| Investment banking and new issue | $20164 | $- |  | $- | $20164 | $- | $20164 |
| Net trading | 9211 |  |  |  | 9211 |  | 9211 |
| New issue and advisory |  | 2020 |  |  | 2020 |  | 2020 |
| Principal transactions |  |  |  | (2330) | (2330) |  | (2330) |
| Other income |  | 438 |  | (763) | (325) |  | (325) |
| Total revenues | 29375 | 2458 |  | (3093) | 28740 |  | 28740 |
| Compensation | 18143 | 1399 |  | 158 | 19700 | 1966 | 21666 |
| Business development | 376 | 58 |  | 1 | 435 | 394 | 829 |
| Occupancy and equipment | 669 | 51 |  |  | 720 | 280 | 1000 |
| Subscriptions, clearing, and execution | 2009 | 86 |  | 26 | 2121 | 53 | 2174 |
| Professional fee and other operating | 1244 | 372 |  | 183 | 1799 | 993 | 2792 |
| Depreciation and amortization |  | 2 |  |  | 2 | 170 | 172 |
| Total operating expenses | 22441 | 1968 |  | 368 | 24777 | 3856 | 28633 |
| Operating income / (loss) | 6934 | 490 |  | (3461) | 3963 | (3856) | 107 |
| Interest expense | (18) |  |  |  | (18) | (1430) | (1448) |
| Income (loss) from equity method affiliates |  |  |  | 2418 | 2418 |  | 2418 |
| Income (loss) before income taxes | 6916 | 490 |  | (1043) | 6363 | (5286) | 1077 |
| Income tax expense (benefit) |  |  |  |  |  | 139 | 139 |
| Net income (loss) | 6916 | 490 |  | (1043) | 6363 | (5425) | 938 |
| Less: Net income (loss) attributable to the non-convertible non-controlling interest of the Operating LLC |  |  |  | (173) | (173) |  | (173) |
| Enterprise net income (loss) | 6916 | 490 |  | (870) | 6536 | (5425) | 1111 |
| Less: Net income (loss) attributable to the convertible non-controlling interest of Cohen & Company Inc. |  |  |  |  |  | 782 | 782 |
| Net income (loss) attributable to Cohen & Company Inc. | $6916 | $490 |  | $(870) | $6536 | $(6207) | $329 |
| *<u>Other statement of operations data</u>* |  |  | |  |  |  |  |
| Compensation and benefits as a percentage of revenue | 61.76 | 56.92 | % | -5.11 | 68.55 | *N/A* | 75.39 |
| Operating income / (loss) as a percentage of revenue | 23.61 | 19.93 | % | 111.90 | 13.79 | *N/A* | 0.37 |
| Net income / (loss) as a percentage of revenue | 23.54 | 19.93 | % | 33.72 | 22.14 | *N/A* | 3.26 |
| Net income / (loss) attributable to Cohen & Company Inc. as a percentage of revenue | 23.54 | 19.93 | % | 28.13 | 22.74 | *N/A* | 1.14 |

---

(*1*) Unallocated includes certain expenses incurred by indirect overhead and support departments (such as the executive, finance, legal, information technology, human resources, risk, compliance, and other similar overhead and support departments). Some of the items *not* allocated include: (*1*) operating expenses (such as cash compensation and benefits, equity-based compensation expense, professional fees, travel and entertainment, consulting fees, and rent) related to support departments excluding certain departments that directly support the Capital Markets business segment; (*2*) interest expense on debt; and (*3*) income taxes. Management does *not* consider these items necessary for an understanding of the operating results of these business segments and such amounts are excluded in business segment reporting to the CODM.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *45*

------

[**Table of Contents**](#toc)

BALANCE SHEET DATA

As of *March 31, 2026*

(Dollars in Thousands)

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | *Capital* |  | *Asset* |  | *Principal* |  | *Segment* |  | *Unallocated* |  |  |  |
|  | *Markets* |  | *Management* |  | *Investing* |  | *Total* |  | *(1)* |  | *Total* |  |
| Total Assets | $616344 |  | $8968 |  | $29194 |  | $654506 |  | $29631 |  | $684137 |  |
| *<u>Included within total assets:</u>* |  | |  | |  | |  | |  | |  | |
| Investments in equity method affiliates | $- |  | $- |  | $11258 |  | $11258 |  | $- |  | $11258 |  |
| Goodwill (2) | $54 |  | $55 |  | $- |  | $109 |  | $- |  | $109 |  |
| Intangible assets (2) | $166 |  | $- |  | $- |  | $166 |  | $- |  | $166 |  |

---

BALANCE SHEET DATA

 *December 31, 2025*

(Dollars in Thousands)

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | *Capital* |  | *Asset* |  | *Principal* |  | *Segment* |  | *Unallocated* |  |  |  |
|  | *Markets* |  | *Management* |  | *Investing* |  | *Total* |  | *(1)* |  | *Total* |  |
| Total Assets | $591923 |  | $11408 |  | $27093 |  | $630424 |  | $70161 |  | $700585 |  |
| *<u>Included within total assets:</u>* |  | |  | |  | |  | |  | |  | |
| Investments in equity method affiliates | $- |  | $- |  | $6661 |  | $6661 |  | $- |  | $6661 |  |
| 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 from the business segment reporting to the CODM.

(*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 March 31,* | *Three Months Ended March 31,* |
|  | *2026* | *2025* |
| Total Revenues: |  |  |
| United States | $55819 | $27489 |
| Europe | 2083 | 1251 |
| Total | $57902 | $28740 |

---

Long-lived assets attributable to an individual country, other than the United States, are *not* material.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *46*

------

[**Table of Contents**](#toc)

***22*. SUPPLEMENTAL CASH FLOW DISCLOSURE** 

Cash flows from investments (including derivatives) classified as investments-trading or trading securities sold, *not* yet purchased, are presented on a net basis as a component of cash flows from operations. Cash flows from investments (including derivatives) classified as other investments, at fair value or other investments sold, *not* yet purchased, are presented on a gross basis as a component of cash flows from investing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest paid by the Company on its debt was $1,251 and $1,417 for the *three* months ended *March 31, 2026* and *2025*, respectively.

The Company paid income taxes of $816 and $150 for the *three* months ended *March 31, 2026* and *2025*, respectively. The Company received income tax refunds of $0 and $0 for the *three* months ended *March 31, 2026* and *2025*, respectively.

For the *three* months ended *March 31, 2026*, the Company had the following significant non-cash transactions that are *not* reflected on the statement of cash flows:

● The Company net received units of membership interest in the Operating LLC. The Company recognized a net increase in additional paid-in capital of $516, a net decrease in AOCI of $7, and a decrease in non-controlling interest of $509. See note *16.*

● The Company recorded a decrease in equity method affiliates of $1,350 and an increase in other investments, at fair value of $1,350 resulting from an in-kind distribution from equity method affiliates.

● The Company recorded an accrual of $7,033 in accounts payable and other liabilities for dividends and distributions declared on *March 6, 2026,* which were paid after *March 31, 2026.* The Company recorded an additional accrual of $1,334 in accounts payable and other liabilities for dividends and distributions to be paid on restricted stock once vested.

For the *three* months ended *March 31, 2025*, the Company had the following significant non-cash transactions that are *not* reflected on the statement of cash flows:

● The Company net received units of membership interest in the Operating LLC. The Company recognized a net increase in additional paid-in capital of $502, a net decrease in AOCI of $13, and a decrease in non-controlling interest of $489. See note *16.*

● The Company recorded an accrual of $1,121 for dividends and distributions declared on *March 10, 2025,* which were paid after *March 31, 2025.*

● The Company recorded a decrease in equity method affiliates of $113 and an increase in other investments, at fair value of $113, resulting from an in-kind distribution from equity method affiliates.

● The Company recorded a decrease of $505 in other investments, at fair value and a decrease of $505 in other investment sold, *not* yet purchased due to the payment of shares to a former SPAC sponsor entity.

● The Company recorded a decrease of $392 in other investments, at air value resulting from an in-kind distribution to the non-convertible controlling interest.

● The Company recorded a decrease in other receivables of $19, a decrease in due from broker of $1,120, a decrease in other investments, at fair value of $1,299, a decrease of other investments sold, *not* yet purchased, at fair value of $344, and a decrease in non-controlling interest of $1,961 resulting from the sale of the Company's interest in Vellar GP.

[**Table of Contents**](#toc)

***23*. RELATED PARTY TRANSACTIONS** 

Certain terms in this footnote are defined in the Company's Annual Report on Form *10*-K for the year ended *December 31, 2025*. The Company has identified the following related party transactions for the *three* months ended *March 31, 2026* and *2025*. The transactions are listed by the 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.

Effective *September 1, 2024,* JKD Investor and the Operating LLC entered into the Redemption Agreement, which terminated the JKD Investment Agreement in its entirety and resulted in the full redemption of the redeemable financial instrument. Pursuant to the Redemption Agreement, the Company issued to JKD Investor the *2024* Note in the principal amount of $5,146. The Company elected to prepay $2,573 of the principal amount of the *2024* Note that was due on *August 31, 2025* on *June 30, 2025.* The interest incurred on the *2024* Note is disclosed in the table below. See notes *4* and *15.*

On *January 31, 2020,* JKD Investor purchased $2,250 of the *2020* Notes. On *January 31, 2022,* the Operating LLC and JKD Investor entered into a 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 *2020* Note in the aggregate principal amount of $4,500. **S**ee note *15.* The Company incurred interest expense on this debt, which is disclosed in the table below. On *January 31, 2026,* the Company paid all interest accrued and principal due and payable under the *2020* Note and the *2020* Note was cancelled. See note *4.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *B. Cohen Circle, LLC ("Cohen Circle")*

Cohen Circle is a related party because Daniel G. Cohen is a member of Cohen Circle. The Company has a sublease agreement as sub-lessor for certain office space with Cohen Circle. The Company received payments under this sublease agreement, in 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *47*

------

[**Table of Contents**](#toc)

*C. Investment Vehicle and Other*

*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.*

On *March 20, 2026,* the Company entered into a loan agreement with BZC Family B.V., a holding company registered in Amsterdam, The Netherlands. BZC Family B.V. is affiliated with Betsy Cohen, the mother of Daniel G. Cohen, the Company's Executive Chairman. Subject to the loan agreement, BZC Family B.V. loaned $2,809 to the Company. The loan bears no interest and is to be repaid on the date three months after the date of the loan agreement. The loan proceeds were to be used to for a capital call relating to an AOI property. See Note *24.*

In *July 2025,* the Company invested $1,156 in the CK Capital Value Fund Cooperatief U.A., a fund affiliated with CK Capital. This investment is included in other investments, at fair value in the consolidated balance sheets as of *March 31, 2026*. The objective of the fund is to realize capital growth and rental income by investing in, actively managing, and adding value to office buildings in The Netherlands, and any ancillary properties and assets.

*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 table below. Revenue earned on the management contract is included as part of asset management and is shown in the table below. As of *March 31, 2026*, the Company owned 1.72% of the equity of the U.S. Insurance JV.

*CREO JV*

CREO JV is considered a related party because it is an equity method investment of the Company. The Company has an investment in and a servicing contract with CREO JV. Income earned or loss incurred on the investment is included as part of principal transactions and other income in the table below. As of *March 31, 2026*, the Company owned 7.5% of the equity of CREO JV.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *48*

------

[**Table of Contents**](#toc)

*D. SPAC Sponsor Entities and Other*

In general, a SPAC is initially funded by a sponsor and that sponsor invests in and receives private placement and 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 had the following transactions with SPACs that are considered to be related parties.

*Columbus Circle II SPAC*

Columbus Circle II SPAC is a related party as it is an equity method investment of the Company. The Company owns 26.5% of Columbus Circle II SPAC. Income earned or loss incurred on this equity method investment is included in the table below. The Company has entered into an administrative services agreement with the Columbus Circle II SPAC. Revenue earned by the Company from this agreement is included as part of principal transactions and other income in the table below. The Company also loaned to Columbus Circle II SPAC approximately $485 to cover expenses relating to the Columbus Circle II SPAC IPO, which was repaid in full at the closing of the Columbus Circle II SPAC IPO. The Columbus Circle II Sponsor and its affiliates, including Cohen & Company LLC, *may* commit to loan Columbus Circle II SPAC up to an additional $1,500 to cover operating and acquisition related expenses following the Columbus Circle II SPAC IPO. CCM acted as the lead underwriter in the Columbus Circle II SPAC IPO and was paid $990 in *2026* for such investment banking services, which is included in the table below. The loans are convertible into private placement units at $10.00 per unit and, accordingly, are convertible into an additional 150,000 private Class A Ordinary Shares of Columbus Circle II SPAC and 50,000 private placement warrants of Columbus Circle II SPAC exercisable at $11.50 per share. If Columbus Circle II SPAC does *not* consummate a Business Combination in the required time frame, *no* funds from Columbus Circle II SPAC's trust account can be used to repay the loans.

*FTAC Emerald*

FTAC Emerald Acquisition Corp. ("FTAC Emerald") was 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. In *February 2025,* FTAC Emerald merged with Fold Holdings, Inc. (NASDAQ:FLD) and the 35,000 founders shares were reduced to an allocation of 19,775 restricted shares, which were distributed to the Company in *June 2025.* 

*BTC Development Corp.*

BTC Development Corp. is a related party because Betsy Cohen, the mother of Daniel G. Cohen, is a member of the board of directors of BTC Development Corp. Cohen Securities was the lead underwriter in BTC Development Corp.'s SPAC IPO. Cohen Securities provided investment banking services to BTC Development Corp. and received cash and non-cash consideration. Any realized or unrealized gains and losses on the non-cash consideration received are recorded in investment banking and new issue in the table below.

*Crane Harbor Acquisition Corp. I/ Crane Harbor Acquisition Corp. II*

Crane Harbor Acquisition Corp. I and Crane Harbor Acquisition Corp. II are a related parties because Edward Cohen and Jonathan Cohen, the father and brother of Daniel G. Cohen, respectively, are members of the board of directors of both Crane Harbor Acquisition Corp. I and Crane Harbor Acquisition Corp. II. Cohen Securities provided investment banking services to both entities and received cash and non-cash consideration. The fees and any realized or unrealized gains and losses on these securities are recorded in investment banking and new issue in the table below.

*Vellar Opportunities GP, LLC*

On *February 25, 2025,* the Operating LLC entered into (i) a Limited Liability Company Interest Purchase Agreement (the "Vellar Purchase Agreement") with Jason Capone and Solomon Cohen, who is the son of the Company's executive chairman, Daniel G. Cohen, and (ii) a Transition Services Agreement (the "Vellar Transition Services Agreement" and, together with the Vellar Purchase Agreement, the "Vellar Agreements") with Vellar Opportunities GP LLC, a Delaware limited liability company ("Vellar GP").

Prior to entering into the Vellar Agreements, the Operating LLC was the managing member and owner of 33.4% of Vellar GP.

Pursuant to the Vellar Purchase Agreement, the Operating LLC sold all of its 33.4% interest in Vellar GP to Solomon Cohen and Jason Capone for an aggregate of $10. As of *February 25, 2025* and as a result of the consummation of the transactions contemplated by the Vellar Purchase Agreement, the Company *no* longer had any investment in Vellar GP. Pursuant to the Vellar Purchase Agreement, the Operating LLC resigned as the managing member of Vellar GP, effective *February 25, 2025.* For the *three* months ended *March 31, 2025,* the Company recorded net loss of $381, related to Vellar GP, which includes both the loss on sale and the results of operations for *2025* period prior to the sale. This amount is *not* included in the table below.

Pursuant to the Vellar Transition Services Agreement, in exchange for the Operating LLC's agreement to provide certain transitional services to Vellar GP, Vellar GP agreed to (i) pay to the Operating LLC certain defined revenue share amounts up to an aggregate of $4,234 and (ii) decrease the amount that the Operating LLC had previously agreed to pay to Vellar GP in connection with the funding of certain Vellar GP litigation expenses from $2,121 to $1,084. *No* revenue share has been earned or paid to date. See note *4.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *49*

------

[**Table of Contents**](#toc)

The following table displays the routine transactions recognized in the consolidated statements of operations from the identified related parties that are described above.

---

| | | |
|:---|:---|:---|
|  | *Three Months Ended March 31,* | *Three Months Ended March 31,* |
|  | *2026* | *2025* |
| **Investment banking and new issue** |  |  |
| BTC Development Corp. | $263 | $- |
| Columbus Circle II SPAC | 991 |  |
| Crane Harbor Acquisition I | 979 |  |
| Crane Harbor Acquisition II | 365 |  |
|  | $2598 | $- |
| **Asset management** |  |  |
| CREO JV | $88 | $151 |
| U.S. Insurance JV | 211 | 245 |
|  | $299 | $396 |
| **Principal transactions and other income** |  |  |
| CK Capital Value Fund | $13 | $- |
| Columbus Circle II SPAC | 15 |  |
| CREO JV | (48) | 72 |
| U.S. Insurance JV | 49 | 61 |
|  | $29 | $133 |
| **Income (loss) from equity method affiliates** |  |  |
| Columbus Circle SPAC II | $(698) | $- |
| Dutch Real Estate Entities | (283) | 316 |
| Other SPAC Entities | 454 | 2102 |
|  | $(527) | $2418 |
| **Operating expense (income)** |  |  |
| Cohen Circle | $(26) | $(26) |
|  | $(26) | $(26) |
| **Interest expense (income)** |  |  |
| JKD Investor | $121 | $286 |
|  | $121 | $286 |

---

The following related party transactions are *not* included in the table above.

*E. Directors and Employees* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company has entered into employment agreements with Daniel G. Cohen and Joseph W. Pooler, Jr., the Company's chief financial officer. The Company has entered into its standard indemnification agreement with each of its directors and executive officers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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 eligible compensation. Contributions made on behalf of the Company were $192 and $140 for the *three* months ended *March 31, 2026* and *2025*, respectively.

On *October 1, 2024,* the Company assumed the final year obligation of a *three*-year corporate aircraft program arrangement from the Company's Executive Chairman, Daniel G. Cohen. The contract, which allowed for an allotted number of hours of air travel on selected aircraft, expired on *September 30, 2025.* The Company utilized the air travel for general business purposes and recorded the expense in business development, occupancy, equipment in the consolidated statement of operations. On *October 1, 2025,* the Company and Cohen Circle jointly entered a *three*-year corporate aircraft program membership agreement, with the contract term going through *September 30, 2028.* The arrangement allows for an allotted number of flight hours on select aircraft. During *2025,* the Company paid $699 for the *first* year of the contract and Cohen Circle will reimburse the Company for any flight hours used for Cohen Circle business purposes. During the *three* months ended *March 31, 2026* and *2025,* the Company recognized $16 and $204, respectively, of expense on this arrangement.

From time to time, the Company purchases produce from Grand Cru Farm as a benefit to its employees. Grand Cru Farm is owned by Daniel G. Cohen. The Company purchased $4 and $11 from Grand Cru Farm during the *three* months ended *March 31, 2026* and *2025*, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *50*

------

[**Table of Contents**](#toc)

***24*. DUE FROM / DUE TO RELATED PARTIES** 

Amounts due to related parties associated with outstanding debt are included as components of those balances in the consolidated balance sheets. In addition, interest or investment return owed on those balances are included as a component of accounts payable and other liabilities in the consolidated balance sheets. Any investment made in an equity method affiliate for which the Company does *not* elect the fair value option is included as a component of investments in equity method affiliates in the consolidated balance sheets. Any investment made in an equity method affiliate for which the Company elected the fair value option is included as a component of other investments, at fair value in the consolidated balance sheets.

The following table summarizes amounts due from / to related parties as of each date shown. These amounts *may* result from normal operating advances, employee advances, or from timing differences between the transactions disclosed in note *23* and final settlement of those transactions in cash. All amounts are primarily non-interest bearing.

DUE FROM RELATED PARTIES

(Dollars in Thousands)

---

| | | |
|:---|:---|:---|
|  | *March 31, 2026* | *December 31, 2025* |
| CREO JV | $88 | $123 |
| Employee & other | 1383 | 874 |
| SPAC Fund - other receivable | 126 | 159 |
| U.S. Insurance JV | 210 | 245 |
| Due from related parties | $1807 | $1401 |

---

DUE TO RELATED PARTIES

(Dollars in Thousands)

---

| | | |
|:---|:---|:---|
|  | March 31, 2026 | December 31, 2025 |
| BZC Family B.V. | $2809 | $- |
|  | $2809 | $- |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *51*

------

[**Table of Contents**](#toc)

 **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 consolidated 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 our Annual Report on Form 10-K for the year ended December 31, 2025.*

*"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. Our business is organized into three business segments:

● <u>Capital Markets</u>: Our Capital Markets business segment consists primarily of sales, trading, underwriting, gestation repo financing, new issue placements in corporate and securitized products, and advisory services. Our sales and trading group provides trade execution to corporate investors, institutional investors, mortgage originators, and other smaller broker-dealers. We specialize in a variety of products, including but not limited to: corporate bonds and loans, special purpose acquisition corporation ("SPAC") equity, preferred equity, asset backed securities ("ABS"), mortgage-backed securities ("MBS"), residential mortgage-backed securities ("RMBS"), collateralized bond obligations ("CBOs"), collateralized mortgage obligations ("CMOs"), municipal securities, to-be-announced securities ("TBAs") and other forward agency MBS contracts, Small Business Administration ("SBA") loans, U.S. government bonds, U.S. government agency securities, brokered deposits and certificates of deposit ("CDs") for small banks, and hybrid capital of financial institutions including whole loans and other structured financial instruments. We operate our capital markets activities primarily through our subsidiaries: Cohen Securities in the United States and CCFESA in Europe. CCM is a division of Cohen Securities.

● <u>Asset Management</u>: Our Asset Management business segment manages assets within investment funds, managed accounts, joint ventures, and collateralized debt obligations ("CDOs") (collectively referred to as "Investment Vehicles"). Our Asset Management business segment includes our fee-based asset management operations, which include ongoing base and incentive management fees.

● <u>Principal Investing</u>: Our Principal Investing business segment is comprised of investments that we have made for the purpose of earning an investment return rather than investments made to support our trading and other Capital Markets business segment activities. These investments are included in our other investments, at fair value; other investments sold, not yet purchased; and investments in equity method affiliates in our consolidated balance sheets.

We generate our revenue by business segment primarily through the following activities.

<u>Capital Markets</u> 

● Investment banking and new issue revenue comprised of (a) origination fees for newly created financial instruments, (b) revenue from advisory services, (c) revenue from underwriting, (d) new issue revenue associated with arranging and placing newly created financial instruments, and (e) any investment returns on financial instruments that we have acquired or received as consideration for services provided by CCM;

● 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; and

● Revenue earned on our gestation repo financing program. 

<u>Asset Management</u> 

● 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 in the Investment Vehicle, and incentive management fees earned based on the performance of the various Investment Vehicles.

<u>Principal Investing</u> 

● 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, which were not acquired as part of the CCM business; and

● Income and loss earned on equity method investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 52

------

[**Table of Contents**](#toc)

***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 investment banking and new issue 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. New risks and uncertainties 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 investment banking and new issue 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 investment banking and new issue services in the U.S. through our subsidiary Cohen Securities. A division of Cohen Securities, CCM is our full-service boutique investment bank providing capital markets and SPAC advisory services to corporations, financial sponsors, investors, and institutions. In some cases, CCM will receive financial instruments in lieu of cash for its investment banking and new issue engagements. In these cases, we record revenue equal to the fair value of the instruments received. Subsequent to receipt, the instruments are carried at fair value as a component of other investments, at fair value in our consolidated balance sheets. Any change in the fair value of these instruments subsequent to recording the investment banking and new issue revenue will be recorded as an adjustment to investment banking and new issue revenue in our consolidated statement of operations. Currently, our primary source of investment banking and new issue revenue is from investment banking and advisory services through CCM, as well as originating assets for our U.S. and European insurance asset management business including our U.S. Insurance JV and for our CREO JV.

A portion of our revenue is generated from management fees. Our ability to charge management fees and the amount of those fees is dependent upon the 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.

A portion of our revenues is generated from our principal investing activities. Therefore, our revenues are impacted by the overall market supply and demand of these investments as well as the individual performance of each investment. Our principal investments are included within other investments, at fair value; other investments sold, not yet purchased; and investments in equity method affiliates in our consolidated balance sheets. More recently, a significant component of our principal investment revenue has come from SPAC related equity investments, primarily in entities that have been the result of sponsored SPAC business combinations or related party sponsored SPAC business combinations. Access to these investments is reliant on a robust SPAC market. Performance of the resulting principal investments can be materially impacted by overall performance of the equity markets. See note 8 to our consolidated financial statements included in this Quarterly Report on Form 10-Q.

*The SPAC Market*

In 2018, we began sponsoring a series of SPACs. 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 general partner of the SPAC Fund ("Vellar GP"), redeemed all of their interests in the SPAC Fund. In 2025, we sold our remaining interest in Vellar GP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 53

------

[**Table of Contents**](#toc)

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 issued a separate series of interest for each investment portfolio, which typically consisted of investments in the sponsor entities of individual SPACs. We are not issuing any new SPAC Series Funds, and this business is winding down. 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.

We are exposed to public equity prices of SPACs and post-business combination SPACs through our other investments, at fair value, investments in equity method affiliates, and other investments sold, not yet purchased. As a result, we recorded significant principal transaction losses and equity method losses 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 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*

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.

*Volatile Interest Rates, Dollar Weakness, and Inflation*

The U.S. macroeconomic environment during the period was characterized by persistent interest rate volatility, continued inflationary pressure, and periods of U.S. dollar weakness. These conditions generally influenced investor sentiment, trading volumes, and pricing dynamics across fixed income markets, which in turn affected our operating results during the periods presented. Interest rate volatility remained elevated as market participants reacted to changes in monetary policy expectations, shifts in economic growth indicators, and evolving inflation data. Heightened rate movements contributed to fluctuating levels of liquidity and spread dispersion across the fixed income securities in which we transact. While volatility can create trading opportunities for our business, it can also reduce market depth and widen bid-ask spreads, which may increase transaction costs and adversely impact our ability to efficiently manage positions. Our performance is significantly influenced by the pace of U.S. mortgage activity. Mortgage origination volumes, refinancing activity, and overall housing market conditions all affect the supply, prepayment behavior, and relative value of mortgage-related securities. Periods of rising interest rates or increased rate uncertainty tend to slow mortgage activity, which can reduce trading flows and dampen client demand for certain mortgage-backed products. Conversely, periods of declining rates or stabilizing rate expectations generally support higher mortgage activity and improved trading conditions in these markets.

Although the U.S. dollar experienced periods of weakness against major currencies during the periods presented, we have limited direct exposure to foreign currency fluctuations. As a result, dollar movements had a minimal impact on our financial results. However, broad macroeconomic trends associated with currency movements—such as changes in global capital flows or investor risk appetite—can indirectly affect liquidity and pricing in U.S. fixed income markets.

Inflation remained above historical norms for much of the periods presented, influencing U.S. Federal Reserve policy actions and contributing to the overall rate environment. Elevated inflation increased uncertainty around the trajectory of short- and long-term interest rates, reinforcing the volatility observed across fixed income markets. These conditions required ongoing adjustments to our risk management strategies, including reassessment of interest rate hedges, duration exposure, and balance sheet positioning. Overall, the combination of volatile interest rates, dollar weakness, and persistent inflation shaped the trading environment for our business. While these factors created both challenges and opportunities, we continued to monitor macroeconomic developments closely and adapt our trading, risk management, and liquidity strategies in response to evolving market conditions.

*Recent Developments in the Middle East*

Beginning in February 2026, geopolitical instability in the Middle East, including disruptions and heightened uncertainty related to shipping through the Strait of Hormuz, has contributed to increased volatility across global financial markets. These conditions may adversely affect liquidity, pricing, and volatility in fixed income and equity markets, result in wider bid-ask spreads and increased margin requirements, and increase interest rate and credit spread volatility, which could negatively impact our trading results and risk management activities. Prolonged market disruption may also reduce client activity levels and negatively affect the timing, volume, and execution of investment banking and underwriting transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 54

------

[**Table of Contents**](#toc)

***Recent Events***

*Columbus Circle Capital Corp. II*

On February 12, 2026, Columbus Circle Capital Corp. II (NASDAQ: CMIIU) (the " Columbus Circle II SPAC"), a blank check company incorporated as a Cayman Islands exempted company and formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (each a "Business Combination"), completed the sale of 23,000,000 units (the "Units") in its initial public offering (the "IPO"), which included 3,000,000 units issued pursuant to the underwriters' full exercise of their over-allotment option.

The Operating LLC owns a portion of, and is the managing member and a member of, Columbus Circle 2 Sponsor Corp. LLC, the sponsor of the Columbus Circle II SPAC (the "Columbus Circle II Sponsor"). CCM acted as the lead underwriter in the IPO.

Each Unit consists of one Class A ordinary share of the Columbus Circle II SPAC, par value $0.0001 per share ("Class A Ordinary Shares"), and one-third of one warrant (each, a "Warrant"); each whole Warrant entitles the holder to purchase one Class A Ordinary Share for $11.50 per share. The Units were sold in the IPO at an offering price of $10.00 per Unit, for gross proceeds of $230,000 (before underwriting discounts and commissions and offering expenses).

If the Columbus Circle II SPAC fails to consummate a Business Combination within the first 24 months following the IPO, its corporate existence will cease except for the purposes of winding up its affairs and liquidating its assets, unless the Columbus Circle II SPAC's shareholders approve an amendment to the Columbus Circle II SPAC's amended and restated memorandum and articles of association (the "SPAC Articles") to extend the amount of time the Columbus Circle II SPAC will have to consummate an initial Business Combination.

The Columbus Circle II Sponsor purchased an aggregate of 265,000 of the Columbus Circle II SPAC's placement units ("Placement Units") in a private placement that occurred simultaneously with the IPO (the "Private Placement") for an aggregate of $2,650, or $10.00 per Placement Unit. Additionally, CCM used its underwriting fee of $3,600 to purchase 360,000 Placement Units in the Private Placement for an aggregate of $3,600. Each Placement Unit consists of one Class A Ordinary Share and one-third of one warrant (a "Placement Warrant"). The Placement Units are identical to the Units sold in the IPO except that Placement Units (including the securities comprising such units and the Class A Ordinary Shares issuable upon exercise of the Placement Warrants) (i) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30 days after the completion of the Columbus Circle II SPAC's initial Business Combination, (ii) will be entitled to certain registration rights, and (iii) with respect to the Placement Warrants held by CCM and/or its designees, will not be exercisable more than five years from the commencement of sales in the IPO in accordance with FINRA rules. Subject to certain limited exceptions, the Placement Units (including the underlying Placement Warrants and Class A Ordinary Shares and the Class A Ordinary Shares issuable upon exercise of the Placement Warrants) will not be transferable, assignable or salable until 30 days after the completion of the Columbus Circle II SPAC's initial Business Combination.

The entire $2,650 invested by the Columbus Circle II Sponsor in consideration for the above-described 265,000 Placement Units of the Columbus Circle II SPAC was raised from third party investors. As the managing member of the Columbus Circle II Sponsor, the Operating LLC consolidates the Columbus Circle II Sponsor and treats the Columbus Circle II Sponsor's investment in the Columbus Circle II SPAC as an equity method investment. The $2,650 raised from third party investors is treated by the Operating LLC as non-controlling interest.

A total of $230,000 of the net proceeds from the Private Placement and the IPO were placed in a trust account. Except for the withdrawal of interest to pay taxes (or dissolution expenses if a Business Combination is not consummated), none of the funds held in the trust account will be released until the earliest of (i) the completion of the Columbus Circle II SPAC's initial Business Combination, (ii) the redemption of the Columbus Circle II SPAC's public Class A Ordinary Shares if the Columbus Circle II SPAC is unable to complete its initial Business Combination within 24 months from the completion of the IPO, and (iii) the redemption of the Columbus Circle II SPAC's public Class A Ordinary Shares properly submitted in connection with a shareholder vote to amend the SPAC Articles to (A) modify the substance or timing of the Columbus Circle II SPAC's obligation to allow redemption in connection with its initial Business Combination or to redeem 100% of the Columbus Circle II SPAC's public shares if the Columbus Circle II SPAC has not consummated an initial Business Combination within 24 months from the completion of the IPO, or (B) with respect to any other material provisions relating to the rights of holders of Class A Ordinary Shares or pre-initial Business Combination activity. If the Columbus Circle II SPAC does not complete a Business Combination, the Placement Units will expire and be worthless.

The Columbus Circle II Sponsor holds an aggregate of 7,666,667 founder shares in the Columbus Circle II SPAC. Subject to certain limited exceptions, the founder shares will not be transferable or salable until the earlier to occur of: (i) six months after the completion of the IPO, and (ii) the date on which the Columbus Circle II SPAC completes a liquidation, merger, share exchange or other similar transaction after its initial Business Combination that results in all of the Columbus Circle II SPAC's shareholders having the right to exchange their Class A Ordinary Shares underlying the founder shares for cash, securities or other property.

Certain non-controlling interests in the Columbus Circle II Sponsor, including executives and key employees of the Operating LLC, purchased membership interests in the Columbus Circle II Sponsor, either directly or indirectly, and have an interest in the Columbus Circle II SPAC's founder shares through such membership interests in the Columbus Circle II Sponsor. The number of the Columbus Circle II SPAC's founders shares in which such non-controlling interests in the Columbus Circle II Sponsor, including such executives and key employees of the Operating LLC, have an interest in through the Columbus Circle II Sponsor will not be finally and definitively determined until consummation of a Business Combination. The number of the Columbus Circle II SPAC's founder shares currently allocated to the Operating LLC is 2,627,383, but such number of founder shares will also not be finally and definitively determined until the consummation of a Business Combination.

In connection with the IPO, the Columbus Circle II Sponsor has agreed to indemnify the Columbus Circle II SPAC for all claims by third parties for services rendered or products sold to the Columbus Circle II SPAC, or a prospective target business with which the Columbus Circle II SPAC has entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement (except for the Columbus Circle II SPAC's independent registered public accounting firm), to the extent such claims reduce the amount of funds in the Columbus Circle II SPAC's trust account to below the lesser of (i) $10.00 per share of Class A Ordinary Shares, and (ii) the actual amount per share of Class A Ordinary Shares held in the Columbus Circle II SPAC's trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the Columbus Circle II SPAC's trust assets, in each case net of taxes, provided that such liability will not apply to any claims (A) by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Columbus Circle II SPAC's trust account or (B) under the Columbus Circle II SPAC's indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended.

The Columbus Circle II Sponsor loaned to the Columbus Circle II SPAC approximately $485 to cover IPO expenses, which was repaid in full at the closing of the IPO. The Columbus Circle II Sponsor and its affiliates, including the Operating LLC, may commit to loan the Columbus Circle II SPAC up to an additional $1,500 to cover operating and acquisition related expenses following the IPO. These loans will bear no interest and, if the Columbus Circle II SPAC consummates a Business Combination in the required time frame, the loans are to be repaid from the funds held in the Columbus Circle II SPAC's trust account. The loans are convertible into private placement units at $10.00 per unit and, accordingly, are convertible into an additional 150,000 private Class A Ordinary Shares and 50,000 Private Placement Warrants exercisable at $11.50 per share. If the Columbus Circle II SPAC does not consummate a Business Combination in the required time frame, no funds from the Columbus Circle II SPAC's trust account can be used to repay the loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 55

------

[**Table of Contents**](#toc)

*Columbus Circle Capital Corp. I* 

On May 19, 2025, Columbus Circle Capital Corp. I (the "Columbus Circle SPAC"), a blank check company incorporated as a Cayman Islands exempted company and formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses (each a "Business Combination"), completed the sale of 25,000,000 units (the "Units") in its initial public offering (the "IPO"), which included 3,000,000 units issued pursuant to the underwriters' partial exercise of their over-allotment option.

On June 23, 2025, the Columbus Circle SPAC entered into a definitive business combination agreement with ProCap BTC, LLC, a Delaware limited liability company ("ProCap BTC"), ProCap Financial, Inc., a Delaware corporation ("ProCap Financial"), Crius SPAC Merger Sub, Inc., a Delaware corporation ("SPAC Merger Sub"), Crius Merger Sub, LLC, a Delaware limited liability company ("Company Merger Sub"), and Inflection Points Inc., d/b/a Professional Capital Management, a Delaware corporation (the "Business Combination Agreement"). Pursuant to the transactions contemplated by the Business Combination Agreement (the "Business Combination"), the Columbus Circle SPAC and ProCap BTC would merge into SPAC Merger Sub and Company Merger Sub, respectively, and become wholly-owned subsidiaries of ProCap Financial, and ProCap Financial became a publicly traded company. Proceeds from the proposed Business Combination, if any, after satisfaction of redemption payments to the Columbus Circle SPAC's public shareholders and transaction expenses, were expected to be used by ProCap Financial to purchase bitcoin, in connection with ProCap Financial's business plans and strategies.

On December 5, 2025, the transactions contemplated by the Business Combination were consummated (the "Closing"). Upon the Closing, Columbus Circle SPAC and ProCap BTC merged into SPAC Merger Sub and Company Merger Sub, respectively, and became wholly-owned subsidiaries of ProCap Financial. ProCap Financial became the go-forward company following the Closing. ProCap Financials' common stock and warrants commenced trading on the Nasdaq Global Market on December 8, 2025 under the symbols "BRR" and "BRRWW," respectively.

From May 19, 2025 until December 5, 2025, we consolidated the sponsor of the Columbus Circle SPAC, which treated its investment in the Columbus Circle SPAC under the equity method of accounting. The sponsor distributed all of its assets and ceased operations in December 2025.

As of March 31, 2026, we held 2,151,666 shares of BRR, which were allocated to us by the sponsor of the Columbus Circle SPAC. As of March 31, 2026, we carried these shares at a value of $4,540 as a component of other investments, at fair value in our consolidated balance sheet. The BRR shares are subject to certain transfer restrictions, which restrictions will lapse and the BRR shares will no longer be subject to these transfer restrictions upon the earliest to occur of the following: (i) the second anniversary of the Closing, (ii) if the closing price of ProCap Financials' common stock equals or exceeds $10.21 per share (subject to customary adjustments) for any 20 trading days within any consecutive 30-trading day period, and (iii) if the dollar volume-weighted average price for Bitcoin (BTC) during any one hundred twenty (120)-hour period equals or exceeds $140 during any five-day period. Any further change in value of these shares until final liquidation will be recorded as principal transactions gain or loss in our consolidated statement of operations. For the three-month period ended March 31, 2026, we recorded a loss of ($3,055) on these shares.

In addition, we served as underwriter and advisor to the Columbus Circle SPAC. As partial consideration for these services, we received 392,000 shares of BRR and 196,000 warrants. As of March 31, 2026, the shares and warrants were carried at a value of $882, and are included as a component of other investments, at fair value in our consolidated balance sheet. For the three-month period ended March 31, 2026, we recorded a loss of ($639) on these shares and warrants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 56

------

[**Table of Contents**](#toc)

***Three*** ***Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025***

The following table sets forth information regarding our consolidated results of operations for the three months ended March 31, 2026 and 2025.

**COHEN & COMPANY INC.**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**(Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Three Months Ended March 31, | Three Months Ended March 31, | Favorable / (Unfavorable) | Favorable / (Unfavorable) |
|  | 2026 | 2025 | $ Change | % Change |
| Revenues |  |  |  |  |
| Investment banking and new issue | $45711 | $20164 | $25547 | 127% |
| Net trading | 13200 | 9211 | 3989 | 43% |
| Asset management | 2419 | 2020 | 399 | 20% |
| Principal transactions and other revenue | (3428) | (2655) | (773) | (29%) |
| Total revenues | 57902 | 28740 | 29162 | 101% |
| Operating expenses |  |  |  |  |
| Compensation and benefits | 41307 | 21666 | (19641) | (91%) |
| Business development, occupancy, equipment | 2383 | 1829 | (554) | (30%) |
| Subscriptions, clearing, and execution | 3952 | 2174 | (1778) | (82%) |
| Professional fee and other operating | 4924 | 2792 | (2132) | (76%) |
| Depreciation and amortization | 203 | 172 | (31) | (18%) |
| Total operating expenses | 52769 | 28633 | (24136) | (84%) |
| Operating income / (loss) | 5133 | 107 | 5026 | 4697% |
| Non-operating income / (expense) |  |  |  |  |
| Interest expense, net | (1335) | (1448) | 113 | 8% |
| Income / (loss) from equity method affiliates | (527) | 2418 | (2945) | (122%) |
| Income / (loss) before income taxes | 3271 | 1077 | 2194 | 204% |
| Income tax expense / (benefit) | (182) | 139 | 321 | 231% |
| Net income / (loss) | 3453 | 938 | 2515 | 268% |
| Less: Net income (loss) attributable to the non-convertible non-controlling interest | (718) | (173) | 545 | 315% |
| Enterprise net income / (loss) | 4171 | 1111 | 3060 | 275% |
| Less: Net income (loss) attributable to the convertible non-controlling interest | 2679 | 782 | (1897) | (243%) |
| Net income / (loss) attributable to Cohen & Company Inc. | $1492 | $329 | $1163 | 353% |

---

*Revenues* 

Revenues increased by $29,162, or 101%, to $57,902 for the three months ended March 31, 2026, as compared to $28,740 for the three months ended March 31, 2025. Each line item is discussed below in more detail.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 57

------

[**Table of Contents**](#toc)

*Investment Banking and New Issue* 

Investment banking and new issue revenue increased by $25,547 to $45,711 for the three months ended March 31, 2026, as compared to $20,164 for the three months ended March 31, 2025.

Our revenue earned from investment banking and new issue 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 investment banking and new issue engagements. These costs are included as a component of either subscriptions, clearing and execution, or professional fees and other. All investment banking and new issue revenue is included in our Capital Markets segment. See note 21 to our consolidated financial statements included in Item 1 of our Quarterly Report on Form 10-Q.

CCM, a division of Cohen Securities, is our full-service boutique investment bank providing capital markets and SPAC advisory services to corporations, financial sponsors, investors, and institutions. In addition, we sometimes generate investment banking and new issue revenue by originating new assets for the U.S. Insurance JV, CREO JV, and our European Pride Funds.

In some cases, CCM will receive financial instruments in lieu of cash for its investment banking and new issue engagements. In these cases, we record investment banking and new issue revenue equal to the fair value of the instruments received. Subsequent to receipt, the instruments are carried at fair value as a component of other investments, at fair value in our consolidated balance sheets. Any change in the fair value of these instruments subsequent to recording the investment banking and new issue revenue will be recorded as an adjustment to investment banking and new issue revenue in the consolidated statement of operations. Further, it should be noted that the financial instruments we receive in these cases are often either (i) common stock investments that are restricted for resale for some period of time, (ii) convertible or non-convertible debt investments that are not publicly traded, (iii) equity investments in special purpose entities that are not publicly traded, or (iv) unrestricted common stock investments in public companies that do not have significant trading volume. Therefore, it may take us a significant period of time to liquidate these investments. We may suffer significant losses prior to final liquidation of these financial instruments, which will impact the results of our Capital Markets segment.

The following table shows the cash and non-cash portion of new issue and advisory revenue:

---

| | | | |
|:---|:---|:---|:---|
|  | Three Months Ended March 31, 2026 | Three Months Ended March 31, 2026 | Three Months Ended March 31, 2026 |
|  | Cash | Non-Cash | Total |
| CCM - Underwriting | $17395 | $5717 | $23112 |
| CCM - Advisory and other new issue | 12105 | 5255 | 17360 |
| Other - Origination |  |  |  |
| Total | 29500 | 10972 | 40472 |
| Gains / (losses) on CCM financial instruments received as non-cash consideration |  |  | 5239 |
| Investment banking and new issue |  |  | $45711 |
|  | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2025 |
|  | Cash | Non-Cash | Net |
| CCM - Underwriting | $2225 | $1634 | $3859 |
| CCM - Advisory and other new issue | 12366 | 17014 | 29380 |
| Other - Origination |  |  |  |
| Total | 14591 | 18648 | 33239 |
| Gains / (losses) on CCM financial instruments received as non-cash consideration |  |  | (13075) |
| Investment banking and new issue |  |  | $20164 |
|  | Change | Change | Change |
|  | Cash | Non-Cash | Total |
| CCM - Underwriting | $15170 | $4083 | $19253 |
| CCM - Advisory and other new issue | (261) | (11759) | (12020) |
| Other - Origination |  |  |  |
| Total | 14909 | (7676) | 7233 |
| Gains / (losses) on CCM financial instruments received as non-cash consideration |  |  | 18314 |
| Investment banking and new issue |  |  | $25547 |

---

When CCM receives financial instruments in exchange for services, the non-cash revenue recorded equals the fair value of the financial instrument received as of the date the underlying transaction closed. CCM's clients include many newly public companies as well as early stage and high growth companies. These companies often have highly volatile stock prices. Accordingly, CCM may experience significant gains or losses subsequent to the receipt of the financial instrument until the financial instrument is finally liquidated. Unless the financial instruments received have been fully liquidated, CCM may experience further gains or losses in the future related to those financial instruments. See note 7 to our consolidated financial statements included in this Quarterly Report on Form 10-Q to review the remaining carrying value of positions held as of the current reporting period date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 58

------

[**Table of Contents**](#toc)

*Net Trading* 

Net trading revenue increased by $3,989, or 43%, to $13,200 for the three months ended March 31, 2026, as compared to $9,211 for the three months ended March 31, 2025. The following table shows the detail by trading group.

NET TRADING

---

| | | | |
|:---|:---|:---|:---|
|  | Three Months Ended March 31, | Three Months Ended March 31, | Three Months Ended March 31, |
|  | 2026 | 2025 | Change |
| Mortgage | $1101 | $949 | $152 |
| Gestation Repo | 5885 | 4180 | 1705 |
| High Yield Corporates | 260 | 394 | (134) |
| Agencies | 497 | 591 | (94) |
| SPAC Equity | 1188 |  | 1188 |
| CMOs | 2087 | 434 | 1653 |
| SBAs | 262 | 428 | (166) |
| Structured Notes | 411 | 1313 | (902) |
| Other | 1509 | 922 | 587 |
| Total | $13200 | $9211 | $3989 |

---

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 gestation 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. All net trading revenue is included in our Capital Markets segment. See note 21 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 59

------

[**Table of Contents**](#toc)

*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 March 31, | As of March 31, | As of December 31, | As of December 31, |
|  | 2026 | 2025 | 2025 | 2024 |
| Pride, managed accounts, and other | $945583 | $926429 | $994170 | $897088 |
| U.S. Insurance JV | 124197 | 154017 | 144127 | 154001 |
| CREO JV | 140196 | 242153 | 192941 | 263308 |
| Company-sponsored CDOs | 101532 | 953363 | 101480 | 965887 |
| Assets under management (1) | $1311508 | $2275962 | $1432718 | $2280284 |

---

(1) 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 increased by $399, or 20%, to $2,419 for the three months ended March 31, 2026, as compared to $2,020 for the three months ended March 31, 2025. The net increase of $399 was comprised of (i) an increase for Pride, management accounts, and other of $824; partially offset by a decrease of $34 for the US Insurance JV; a decrease of $64 from the CREO JV, and a decrease in $327 for company-sponsor CDOs.

*Principal Transactions and Other Income (Loss)*

Principal transactions and other income (loss) decreased by $773 to ($3,428) for the three months ended March 31, 2026, as compared to ($2,655) for the three months ended March 31, 2025. The following table summarizes principal transactions and other income by category.

PRINCIPAL TRANSACTIONS & OTHER INCOME

---

| | | | |
|:---|:---|:---|:---|
|  | Three Months Ended March 31, | Three Months Ended March 31, | Three Months Ended March 31, |
|  | 2026 | 2025 | Change |
| <u>Interests in public companies:</u> |  |  |  |
| Brand Engagement Network, Inc. (NASDAQ: BNAI) | $326 | $(122) | $448 |
| ProCap Financial, Inc. (NASDAQ:BRR) | (3055) |  | (3055) |
| Critical Metals Corp. (NASDAQ: CRML) |  | (2393) | 2393 |
| Murano Global Investments PLC (NASDAQ: MRNO) | (727) |  | (727) |
| Payoneer Global Inc. (NASDAQ: PAYO) | (218) | (774) | 556 |
| Rezolve AI PLC (NASDAQ: RZLV) |  | (505) | 505 |
| CREO JV | (48) | 72 | (120) |
| U.S. Insurance JV | 49 | 61 | (12) |
| CK Capital Fund | 13 |  | 13 |
| SFAs |  | 1404 | (1404) |
| Other | (255) | (73) | (182) |
| Total principal transactions | (3915) | (2330) | (1585) |
| IIFC revenue share | 263 | 469 | (206) |
| Sale of Vellar GP |  | (836) | 836 |
| All other income | 224 | 42 | 182 |
| Other income | 487 | (325) | 812 |
| Principal transactions and other income (loss) | $(3428) | $(2655) | $(773) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 60

------

[**Table of Contents**](#toc)

*Interests in Public Companies*

These investments represent our direct and indirect investments in certain public companies. These investments may be in the form of unrestricted common stock, restricted common stock, equity derivatives, convertible notes and non-convertible notes receivable, as well as equity interest in SPVs that have investments in public companies. The name and stock symbol of each public company in which we have a direct or indirect investment is listed in the table above. The amounts shown represent the change in the fair value of our investment during each time period noted in the table.

*Other Principal Investments*

CREO JV invests in primarily multi-family commercial real estate mortgage-backed loans. We carry our investment in the CREO JV at its reported NAV.

U.S. Insurance JV invests in insurance company debt. We carry our investment in the U.S. Insurance JV at its reported NAV.

CK Capital Fund is a fund that invests in Dutch real estate. We carry our investment in CK Capital Fund at its reported NAV.

Other principal investments consist of realized and unrealized gains and losses from other investments reported at fair value.

*Other Income*

Other income is comprised of an ongoing revenue share arrangement as well as other miscellaneous operating income items. The loss on sale of Vellar GP related to the sale of our interest in the Vellar GP consummated in the three months ended March 31, 2025. 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 $10,304 in revenue share income. Other income is recorded in all three of our segments. See note 29 to our consolidated financial statements included in our Annual Report on Form 10-K.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 61

------

[**Table of Contents**](#toc)

*Operating Expenses* 

Operating expenses increased by $24,136, or 84%, to $52,769 for the three months ended March 31, 2026, as compared to $28,633 for the three months ended March 31, 2025. Each line item is discussed in more detail below.

*Compensation and Benefits* 

Compensation and benefits increased by $19,641, or 91%, to $41,307 for the three months ended March 31, 2026, as compared to $21,666 for the three months ended March 31, 2025.

COMPENSATION AND BENEFITS

---

| | | | |
|:---|:---|:---|:---|
|  | Three Months Ended March 31, | Three Months Ended March 31, | Three Months Ended March 31, |
|  | 2026 | 2025 | Change |
| Cash compensation and benefits | $40015 | $20508 | $19507 |
| Equity-based compensation | 1292 | 1158 | 134 |
| Total | $41307 | $21666 | $19641 |

---

Cash compensation and benefits in the table above was primarily comprised of salary, incentive compensation, severance, employer portion of payroll taxes, and benefits. The increase was primarily the result of increased incentive compensation driven by increased revenue. Our total headcount was 128 at March 31, 2026 and 117 at March 31, 2025. Equity-based compensation remained relatively unchanged.

*Business Development, Occupancy, and Equipment* 

Business development, occupancy, and equipment increased by $554, or 30%, to $2,383 for the three months ended March 31, 2026, as compared to $1,829 for the three months ended March 31, 2025. This increase was comprised of an increase in business development of $427 and an increase in occupancy and equipment of $127.

*Subscriptions, Clearing, and Execution* 

Subscriptions, clearing, and execution increased by $1,778, or 82%, to $3,952 for the three months ended March 31, 2026, as compared to $2,174 for the three months ended March 31, 2025. The increase was comprised of an increase in clearing and execution of $1,565 and an increase in subscriptions of $213.

*Professional Fee and Other Operating Expenses* 

Professional fees and other operating expenses increased by $2,132, or 76%, to $4,924 for the three months ended March 31, 2026, as compared to $2,792 for the three months ended March 31, 2025. This increase is comprised of an increase in professional fees of $2,433; partially offset by a decrease in other operating expenses of $301.

*Depreciation and Amortization* 

Depreciation and amortization increased by $31, or 18%, to $203 for the three months ended March 31, 2026, as compared to $172 for the three months ended March 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 62

------

[**Table of Contents**](#toc)

*Non-Operating Income and Expense* 

*Interest Expense, net*

Interest expense, net decreased by $113 to $1,335 for the three months ended March 31, 2026, as compared to $1,448 for the three months ended March 31, 2025.

---

| | | | |
|:---|:---|:---|:---|
|  | Three Months Ended March 31, | Three Months Ended March 31, | Three Months Ended March 31, |
|  | 2026 | 2025 | Change |
| Junior subordinated notes | $1170 | $1144 | $26 |
| 2020/2024 Notes | 121 | 286 | (165) |
| Byline Credit Facility | 44 | 18 | 26 |
|  | $1335 | $1448 | $(113) |

---

See notes 15 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.

*Income / (Loss) from Equity Method Affiliates*

Income / (loss) from equity method affiliates decreased by $2,945 to ($527) for the three months ended March 31, 2026, as compared to $2,418 for the three months ended March 31, 2025. See note 11 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.

---

| | | | |
|:---|:---|:---|:---|
|  | Three Months Ended March 31, | Three Months Ended March 31, | Three Months Ended March 31, |
|  | 2026 | 2025 | Change |
| Dutch Real Estate Entities | $(283) | $316 | $(599) |
| Columbus Circle II SPAC | (698) |  | (698) |
| SPAC Sponsor Entities and Other | 454 | 2102 | (1648) |
| Total | $(527) | $2418 | $(2945) |

---

SPAC sponsor entities and other 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 or loss included in other SPAC sponsor entities 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.

---

| | | | |
|:---|:---|:---|:---|
|  | Three Months Ended March 31, | Three Months Ended March 31, | Three Months Ended March 31, |
|  | 2026 | 2025 | Change |
| Critical Metals Corp. (NASDAQ: CRML) | $- | $(367) | $367 |
| Fold Holdings, Inc. (NASDAQ: FLD) |  | 2364 | (2364) |
| Murano Global Investments Plc (NASDAQ: MRNO) | 454 | 217 | 237 |
| Other |  | (112) | 112 |
| Total | $454 | $2102 | $(1648) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 63

------

[**Table of Contents**](#toc)

***Income Tax Expense / (Benefit)***

Income tax expense / (benefit) decreased by $321 to ($182) for the three months ended March 31, 2026, as compared to $139 for the three months ended March 31, 2025.

---

| | | | |
|:---|:---|:---|:---|
|  | For the Three Months Ended March 31, | For the Three Months Ended March 31, | For the Three Months Ended March 31, |
|  | 2026 | 2025 | Change |
| Current | $(182) | $54 | $236 |
| Deferred |  | 85 | 85 |
| Total | $(182) | $139 | $321 |

---

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%. Our 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 three months ended March 31, 2026, Cohen & Company Inc. owned 30.4% 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 amount, the related tax expense is recognized in our consolidated financial statements. The remaining 69.6% of income/(loss) generated by the Operating LLC was allocated to the non-controlling members of the Operating LLC and is subject to taxation on such members' individual tax returns.

2. The Operating LLC itself consolidates certain pass-through entities. Therefore, the income/(loss) of these entities is included in our consolidated results, but no tax expense/(benefit) related to the unowned portions of these entities is included in our consolidated results.

3. There are state, local, and foreign taxes that the Operating LLC or its subsidiaries are subject to, which are included in our effective tax rate.

4. We also have valuation allowances applied against our NOL and NCL carryforward 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 64

------

[**Table of Contents**](#toc)

***Net Income / (Loss) Attributable to the Non-Convertible Non-Controlling Interest***

Net income / (loss) attributable to the non-convertible non-controlling interest for the three months ended March 31, 2026 and 2025 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.

---

| | | | |
|:---|:---|:---|:---|
|  | Three Months Ended March 31, | Three Months Ended March 31, | Three Months Ended March 31, |
|  | 2026 | 2025 | Change |
| Other SPAC Sponsor Investor | $(134) | $(1037) | $(903) |
| Columbus Circle II SPAC | (584) |  | 584 |
| Vellar GP |  | 864 | 864 |
| Total | $(718) | $(173) | $545 |

---

Other SPAC Sponsor Investor represents an entity that we consolidate, but do not wholly own, that invests in other SPAC sponsor entities. We sold our interest in Vellar GP during 2025. Columbus Circle II SPAC was launched in the three months ended March 31, 2026. See note 4 to our consolidated financial statements included in this Quarterly Report on Form 10-Q.

***Net Income / (Loss) Attributable to the Convertible Non-Controlling Interest***

Net income / (loss) attributable to the convertible non-controlling interest for the three months ended March 31, 2026 and 2025 was comprised of the non-controlling interest related to member interests in the Operating LLC other than interests held by us in the Operating LLC 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, 2025.

For the Three Months Ended March 31, 2026

---

| | | | |
|:---|:---|:---|:---|
|  | Total Operating LLC | Cohen & |  |
|  | Consolidated | Company Inc. | Consolidated |
| Net income / (loss) before tax | $3271 | $- | $3271 |
| Income tax expense / (benefit) | 138 | (320) | (182) |
| Net income / (loss) after tax | 3133 | 320 | 3453 |
| Other consolidated subsidiary non-controlling interest | (718) |  |  |
| Net income / (loss) attributable to the Operating LLC | 3851 |  |  |
| Average effective Operating LLC non-controlling interest % (1) | 69.57% |  |  |
| Operating LLC non-controlling interest | $2679 |  |  |

---

For the Three Months Ended March 31, 2025

---

| | | | |
|:---|:---|:---|:---|
|  | Total Operating LLC | Cohen & |  |
|  | Consolidated | Company Inc. | Consolidated |
| Net income / (loss) before tax | $1077 | $- | $1077 |
| Income tax expense / (benefit) | 140 | (1) | 139 |
| Net income / (loss) after tax | 937 | 1 | 938 |
| Other consolidated subsidiary non-controlling interest | (173) |  |  |
| Net income / (loss) attributable to the Operating LLC | 1110 |  |  |
| Average effective Operating LLC non-controlling interest % (1) | 70.45% |  |  |
| Operating LLC non-controlling interest | $782 |  |  |

---

(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 65

------

[**Table of Contents**](#toc)

**Liquidity and Capital Resources** 

Liquidity is a measurement of our ability to meet potential cash requirements including ongoing commitments to repay debt borrowings, make interest payments on outstanding borrowings, fund investments, and support other general business purposes. In addition, our United States and European broker-dealer subsidiaries are subject to certain regulatory requirements to maintain minimum levels of net capital. Historically, our primary sources of funds have been our operating activities and general corporate borrowings. In addition, our trading operations have generally been financed by the use of collateralized securities financing arrangements as well as margin loans.

Certain subsidiaries of the Operating LLC have restrictions on the withdrawal of capital and otherwise in making distributions and loans. Cohen Securities is subject to net capital restrictions imposed by the SEC and FINRA that require certain minimum levels of net capital to remain in this subsidiary. In addition, these restrictions could potentially impose notice requirements or limit our ability to withdraw capital above the required minimum amounts (excess capital) whether through a distribution or a loan. CCFESA is subject to the regulations of the ACPR, which imposes minimum capital requirements. See note 25 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.

See *Liquidity and Capital Resources – Contractual Obligations* below.

During the third quarter of 2010, our board of directors initiated a dividend of $0.50 per quarter, which was paid regularly through December 31, 2011. Beginning in 2012, our board of directors declared a dividend of $0.20 per quarter, which was paid regularly through the first quarter of 2019. Each time a cash dividend was declared by our board of directors, a pro rata distribution was made to the other members of the Operating LLC upon payment of dividends to our stockholders.

In July 2021, our board of directors reinstated our quarterly dividend, declaring a cash dividend of $0.25 per share. We have paid a quarterly cash dividend of $0.25 regularly since that date. In addition to our routine quarterly distribution, on March 8, 2022, December 22, 2025, and March 6, 2026, our board of directors declared special cash dividends on its Common Stock of $0.75, $2.00, and $0.70 per share, respectively. On May 1, 2026, our board of directors declared a quarterly cash dividend of $0.25 per share on its Common Stock. The dividends are payable on June 2, 2026, to stockholders of record as of May 18, 2026.

We had the following financing transactions in excess of $1,000 during the three months ended March 31, 2026, excluding dividends paid on Common Stock, the pro rata distributions made to the convertible non-controlling interest, and non-cash items:

● We received investments of $2,666 in non-convertible non-controlling interests.

● We redeemed $1,883 of convertible non-controlling interest.

● We repaid the 2020 Note for $4,500.

We had no other financing transactions in excess of $1,000 for the three months ended March 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 66

------

[**Table of Contents**](#toc)

***Cash Flows***

We have seven primary uses for capital:

(1) *To fund the operations of our Capital Markets business segment*. Our Capital Markets business segment utilizes capital (i) to fund securities inventory to facilitate client trading activities, (ii) for risk trading for our own account, (iii) to fund our collateralized securities lending activities, (iv) for temporary capital needs associated with underwriting activities, (v) to fund business expansion into existing or new product lines including additional capital dedicated to our mortgage group as well as our gestation repo business, and (vi) to fund any operating losses incurred.

(2) *To fund the expansion of our Asset Management business segment*. We generally grow our AUM by sponsoring new Investment Vehicles. The creation of a new Investment Vehicle often requires us to invest a certain amount of our own capital to attract outside capital to manage. Also, these new Investment Vehicles often require warehouse and other third-party financing to fund the acquisition of investments. Finally, we generally will hire employees to manage new Investment Vehicles and will operate at a loss for a startup period. 

(3) *To fund investments*. We make principal investments (including sponsor and other investments in SPACs) to generate returns. We may need to raise additional debt or equity financing in order to ensure we have the capital necessary to take advantage of attractive investment opportunities. 

(4) *To fund mergers or acquisitions*. We may opportunistically use capital to acquire other asset managers, individual asset management contracts, or financial services firms. To the extent our liquidity sources are insufficient to fund our future merger or acquisition activities, we may need to raise additional funding through an equity or debt offering. No assurances can be given that additional financing will be available in the future, or that if available, such financing will be on favorable terms.

(5) *To fund potential dividends and distributions*. We sometimes pay dividends. Each time a cash dividend was declared by our board of directors, a pro rata distribution was made to the other members of the Operating LLC upon payment of dividends to our stockholders. 

(6) *To fund potential repurchases of Common Stock.* We have opportunistically repurchased Common Stock in private transactions.

(7) *To pay off debt as it matures.* We have indebtedness that must be repaid as it matures. See note 15 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.

If we are unable to raise sufficient capital on economically favorable terms, we may need to reduce the amount of capital invested for the uses described above, which may adversely impact earnings and our ability to pay dividends.

As of March 31, 2026 and December 31, 2025, we maintained cash and cash equivalents of $18,992 and $56,762, respectively. We generated cash from or used cash for the activities described below.

SUMMARY CASH FLOW INFORMATION

---

| | | |
|:---|:---|:---|
|  | Three Months Ended March 31, | Three Months Ended March 31, |
|  | 2026 | 2025 |
| Cash flow from operating activities | $(31208) | $(6372) |
| Cash flow from investing activities | 2522 | 4189 |
| Cash flow from financing activities | (8922) | (3631) |
| Effect of exchange rate on cash | (162) | 209 |
| Net cash flow | (37770) | (5605) |
| Cash and cash equivalents, beginning | 56762 | 19590 |
| Cash and cash equivalents, ending | $18992 | $13985 |

---

See the statement of cash flows in our consolidated financial statements. We believe our available cash and cash equivalents, as well as our investment in our trading portfolio and related borrowing capacity, will provide sufficient liquidity to meet the cash needs of our ongoing operations in the near term.

*Three Months Ended March 31, 2026*

As of March 31, 2026, our cash and cash equivalents were $18,992, representing a decrease of $37,770 from December 31, 2025. The decrease was attributable to cash used in operating activities of $31,208, cash provided by investing activities of $2,522, cash used in financing activities of $8,922, and a decrease in cash caused by the change in exchange rates of $162.

The cash used in operating activities of $31,208 was comprised of (a) net cash outflows of $42,609 related to working capital fluctuations; (b) net cash inflows of $18,014 from trading activities comprised of our investments-trading, trading securities sold, not yet purchased, receivables under resale agreements, securities sold under agreements to repurchase, and receivables and payables from brokers, dealers, and clearing agencies, as well as the changes in unrealized gains and losses on the investments-trading and trading securities sold, not yet purchased; and (c) net cash outflows from other earnings items of $6,613 (which represents net income or loss adjusted for the following non-cash operating items: other income / (expense), non-cash revenue, realized and unrealized gains and losses and accretion of income on other investments, income/(loss) from equity method affiliates, equity based compensation, depreciation and amortization, deferred taxes, and amortization of discount on debt).

The cash provided by investing activities of $2,522 was comprised of (a) sales and returns of principal - other investments, at fair value of $7,639; (b) sales and returns of principal - other investments sold, not yet purchased at fair value of $694; partially offset by (c) $5,483 of investments in equity method affiliates; and (d) $328 in purchases of furniture, equipment, and leasehold improvements.

The cash used in financing activities of $8,922 was comprised of (a) $4,500 repayment of the 2020 Note; (b) $638 of cash used to net settle equity awards; (c) $5,181 in dividends; (d) $1,883 in redemption of convertible non-controlling interest units; partially offset by (e) $614 in proceeds from the sale of Common Stock; and (f) $2,666 in investments in the non-convertible non-controlling interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 67

------

[**Table of Contents**](#toc)

*Three Months Ended March 31, 2025*

As of March 31, 2025, our cash and cash equivalents were $13,985, representing a decrease of $5,605 from December 31, 2024. The decrease was attributable to cash used in operating activities of $6,372, cash provided by investing activities of $4,189, cash used in financing activities of $3,631, and an increase in cash caused by the change in exchange rates of $209.

The cash used in operating activities of $6,372 was comprised of (a) net cash outflows of $4,794 related to working capital fluctuations; (b) net cash inflows of $789 from trading activities comprised of our investments-trading, trading securities sold, not yet purchased, receivables under resale agreements, securities sold under agreements to repurchase, and receivables and payables from brokers, dealers, and clearing agencies, as well as the changes in unrealized gains and losses on the investments-trading and trading securities sold, not yet purchased; and (c) net cash outflows from other earnings items of $2,367 (which represents net income or loss adjusted for the following non-cash operating items: other income / (expense), non-cash revenue, realized and unrealized gains and losses and accretion of income on other investments, income/(loss) from equity method affiliates, equity based compensation, depreciation and amortization, deferred taxes, and amortization of discount on debt).

The cash provided by investing activities of $4,189 was comprised of (a) $14,657 of sales and returns of principal from other investments, at fair value; (b) $1,308 of distributions received from equity method affiliates; partially offset by (c) $11,186 in cash used to purchase other investments, at fair value; (d) $433 in reduction in cash from the disposal of our interest in Vellar GP; and (e) $157 in cash used to purchase furniture, equipment, and leasehold improvements.

The cash used in financing activities of $3,631 was comprised of (a) $340 in cash used to net settle equity awards; (b) $383 in dividends paid on Common Stock; (c) $1,110 in convertible non-controlling interest distributions; (d) $954 in redemption of convertible non-controlling interest units; and (e) $844 of non-convertible noncontrolling interest distributions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 68

------

[**Table of Contents**](#toc)

***Regulatory Capital Requirements***

We have two subsidiaries that are licensed securities dealers: Cohen Securities in the United States and CCFESA in France. As a U.S. broker-dealer, Cohen Securities is subject to the Uniform Net Capital Rule in Rule 15c3-1 under the Exchange Act. CCFESA is subject to the regulations of the ACPR. The amount of net assets that these subsidiaries may distribute is subject to restrictions under the applicable net capital rules. These subsidiaries have historically operated in excess of minimum net capital requirements. Our minimum capital requirements at March 31, 2026 were as follows.

MINIMUM NET CAPITAL REQUIREMENTS

---

| | |
|:---|:---|
|  | March 31, 2026 |
| United States | $250 |
| Europe | 701 |
| Total | $951 |

---

We operate with more than the minimum regulatory capital requirement in our licensed broker-dealers and at March 31, 2026, total net capital, or the equivalent as defined by the relevant statutory regulations, in our licensed broker-dealers totaled $73,270. See note 18 to our consolidated financial statements included in Item 1 in this Quarterly Report on Form 10-Q. In addition, our licensed broker-dealers are generally subject to capital withdrawal notification and restrictions.

***Restrictions of Distributions of Capital from Cohen Securities***

As of March 31, 2026, our total equity on a consolidated basis was $100,146 and the total equity of Cohen Securities was $105,478. Therefore, a deficit of $5,332 existed outside of Cohen Securities. In addition, it should be noted that our non-convertible non-controlling interest represents equity that is included in our consolidated financial statements but is not available to the Operating LLC to fund operations outside of those specific consolidated but not wholly owned subsidiaries. As of March 31, 2026, our non-convertible non-controlling interest balance was $2,386. Therefore, we have an equity deficit outside of Cohen Securities of $7,718 as of March 31, 2026.

From time to time, we may need to take distributions of income (and potentially returns of capital) from Cohen Securities to satisfy the cash needs as a result of the losses incurred outside of Cohen Securities or to satisfy other obligations that come due outside of Cohen Securities. However, we are subject to significant limitations on our ability to make distributions from Cohen Securities. These limitations include limitations imposed by FINRA under Rule 15c3-1 under the Exchange Act (described immediately above) and limitations under our line of credit with Byline Bank (see note 15 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q). Furthermore, counterparties to Cohen Securities have their own internal counterparty credit requirements. The specific requirements are not generally shared with us. However, if we take too much in capital distributions from Cohen Securities (beyond its net income), we may not be able to trade with certain counterparties. In addition, we rely on available net capital to complete firm underwritings. Therefore, significant distributions from Cohen Securities may cause Cohen Securities' operations to deteriorate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 69

------

[**Table of Contents**](#toc)

***Securities Financing***

We maintain repurchase agreements with various third-party institutions. There is no maximum limit as to the amount of securities that may be transferred pursuant to these agreements, and transactions are approved on a case-by-case basis. The repurchase agreements do not include substantive provisions other than those covenants and other customary provisions contained in standard master repurchase agreements. The repurchase agreements generally require us to transfer additional securities to the counterparty in the event the value of the securities then held by the counterparty in the margin account falls below specified levels and contain events of default in cases where we breach our obligations under the agreement. We receive margin calls from our repurchase agreement counterparties from time to time in the ordinary course of business. To date, we have maintained sufficient liquidity to meet margin calls, and we have always been able to satisfy a margin call, however, no assurance can be given that we will be able to satisfy requests from our counterparties to post additional collateral in the future. See note 10 to our consolidated financial statements included in Item 1 in this Quarterly Report on Form 10-Q.

If there were an event of default under a repurchase agreement, the counterparty would have the option to terminate all repurchase transactions existing with us and make any amount due from us to the counterparty payable immediately. Repurchase obligations are full recourse obligations to us. If we were to default under a repurchase obligation, the counterparty would have recourse to our other assets if the collateral was not sufficient to satisfy the obligation in full. Most of our repurchase agreements are entered into as part of our gestation repo business.

Our clearing brokers provide securities financing arrangements including margin arrangements and securities borrowing and lending arrangements. These arrangements generally require us to transfer additional securities or cash to the clearing broker in the event the value of the securities then held by the clearing broker in the margin account falls below specified levels and contain events of default in cases where we breach our obligations under such agreements.

An event of default under the clearing agreement would give our counterparty the option to terminate our clearing arrangement. Any amounts owed to the clearing broker would be immediately due and payable. These obligations are recourse to us. Furthermore, a termination of any of our clearing arrangements would result in a significant disruption to our business and would have a significant negative impact on our dealings and relationship with our customers.

The following table presents our period end balance, average monthly balance, and maximum balance at any month end during the three months ended March 31, 2026 and the twelve months ended December 31, 2025 for receivables under resale agreements and securities sold under agreements to repurchase.

---

| | | |
|:---|:---|:---|
|  | For the Three Months Ended March 31, 2026 | For the Twelve Months Ended December 31, 2025 |
| Receivables under resale agreements |  |  |
| Period end | $359602 | $357408 |
| Monthly average | $345928 | $619894 |
| Maximum month end | $359602 | $811908 |
| Securities sold under agreements to repurchase |  |  |
| Period end | $402389 | $400391 |
| Monthly average | $391102 | $652260 |
| Maximum month end | $403621 | $840249 |

---

Fluctuations in the balance of our repurchase agreements from period to period and intra-period are dependent on business activity in those periods. The fluctuations in the balances of our receivables under resale agreements over the periods presented were impacted by our clients' desires to execute on balance sheet collateralized financing arrangements.

Average balances and period end balances will fluctuate based on market and liquidity conditions and we consider such intra-period fluctuations as typical for the repurchase market. Month-end balances may be higher or lower than average period balances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 70

------

[**Table of Contents**](#toc)

***Debt Financing***

The following table summarizes our long-term indebtedness and other financing outstanding. See note 15 to our consolidated financial statements included in Item 1 in this Quarterly Report on Form 10-Q for a discussion of our outstanding debt.

DETAIL OF DEBT

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | As of March 31, 2026 | As of December 31, 2025 | Interest Rate Terms | Interest (2) | Maturity |
| Description |  |  |  |  |  |
| Non-convertible debt: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; 12.00% senior note (the "2024 Note") | $2573 | $2573 | Fixed | 12.00% | August 2026 |
| 12.00% senior note (the "2020 Note") |  | 4500 | Fixed | 12.00% | January 2026 |
|  | 2573 | 7073 |  |  |  |
| Junior subordinated notes: (1) |  |  |  |  |  |
| Alesco Capital Trust I | 28125 | 28125 | Variable | 7.93% | July 2037 |
| Sunset Financial Statutory Trust I | 20000 | 20000 | Variable | 8.11% | March 2035 |
| Less unamortized discount | (22108) | (22303) |  |  |  |
|  | 26017 | 25822 |  |  |  |
| Byline Credit Facility |  |  | Variable | NA | June 2026 |
| Total | $28590 | $32895 |  |  |  |

---

(1) The junior subordinated notes listed represent debt we owe to the two trusts noted above. The total par amount owed by us to the trusts is $49,614. However, we own the common stock of the trusts in a total par amount of $1,489. We pay interest (and at maturity, principal) to the trusts on the entire $49,614 junior notes outstanding. However, we receives back from the trusts the pro rata share of interest and principal on the common stock held by us. These trusts are VIEs and we do not consolidate them even though we hold the common stock. We carry the common stock on its balance sheet at a value of $0. The junior subordinated notes are recorded at a discount to par. When factoring in the discount, the yield to maturity of the junior subordinated notes as of March 31, 2026 on a combined basis was 18.88% 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. 

***Off-Balance Sheet Arrangements***

Other than as described in note 9 (derivative financial instruments) and note 14 (variable interest entities) to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q, there were no material off balance sheet arrangements as of March 31, 2026.

***Contractual Obligations***

The table below summarizes our significant contractual obligations as of March 31, 2026 and the future periods in which such obligations are expected to be settled in cash. Our junior subordinated notes are assumed to be repaid on their respective maturity dates. Excluded from the table below are obligations that are short-term in nature, including trading liabilities (including derivatives) and repurchase agreements. In addition, amortization of discount on debt is excluded.

CONTRACTUAL OBLIGATIONS

March 31, 2026

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Payment Due by Period | Payment Due by Period | Payment Due by Period | Payment Due by Period | Payment Due by Period |
|  | Total | Less than 1 Year | 1 - 3 Years | 3 - 5 Years | More than 5 Years |
| Operating lease arrangements | $21240 | $2934 | $5825 | $4677 | $7804 |
| Maturity of 2024 Note (1) | 2573 | 2573 |  |  |  |
| Interest on 2024 Note (1) | 206 | 206 |  |  |  |
| Maturities on junior subordinated notes | 48125 |  |  |  | 48125 |
| Interest on junior subordinated notes (2) | 40246 | 3852 | 7705 | 7705 | 20984 |
| Other Operating Obligations (3) | 2734 | 1909 | 825 |  |  |
|  | $115124 | $11474 | $14355 | $12382 | $76913 |

---

(1) The 2024 Note matures on August 31, 2026. 

(2) The interest on the junior subordinated notes related to Alesco Capital Trust I is variable. The interest rate of 7.93% (based on the Term SOFR rate in effect as of March 31, 2026 plus 4.00%) was used to compute the contractual interest payment in each period noted. The interest on the junior subordinated notes related to Sunset Financial Statutory Trust I is variable. The interest rate of 8.11% (based on the Term SOFR rate in effect as of March 31, 2026 plus 4.15%) was used to compute the contractual interest payment in each period noted.

(3) Represents material operating contracts for various services. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 71

------

[**Table of Contents**](#toc)

We believe that we will be able to continue to fund our current operations and meet our contractual obligations through a combination of existing cash resources and other sources of credit. Due to the uncertainties that exist in the economy, we cannot be certain that we will be able to replace existing financing or find sources of additional financing in the future.

***Recent Accounting Pronouncements***

The following is a list of recent accounting pronouncements that we believe will have a continuing impact on our financial statements going forward.

In November 2024, the FASB issued ASU 2024-03, *Income Statement* — *Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.* The ASU requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statements. The ASU is effective for all entities for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, which was clarified in ASU 2025-01. We are currently evaluating the new guidance to determine the impact it may have on our consolidated financial statements.

In May 2025, the FASB issued ASU 2025-03, *Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entit*y. The ASU revises current guidance for determining the accounting acquirer for a transaction effected primarily by exchanging equity interests in which the legal acquiree is a variable interest entity that meets the definition of a business. The amendments require an entity to consider the same factors that are currently required for determining which entity is the accounting acquirer in other acquisition transactions. The ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting within those annual reporting periods. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued (or made available for issuance). We are currently evaluating the new guidance to determine the impact it may have on our consolidated financial statements.

In May 2025, the FASB issued ASU 2025-04, *Compensation*— *Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer.* The amendments in this ASU affect the timing of revenue recognition for entities that offer to pay share-based consideration (e.g., equity instruments) to a customer (or to other parties that purchase the entity's goods or services from the customer) to incentivize the customer (or its customers) to purchase its goods and services. Specifically, the amendments clarify the requirements for share-based consideration payable to a customer that vest upon the customer purchasing a specified volume or monetary amount of goods and services from the entity. The ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting within those annual reporting periods. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued (or made available for issuance). We are currently evaluating the new guidance to determine the impact it may have on our consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, *Intangibles*—*Goodwill and Other*—*Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software*. The amendments in this ASU require that an entity capitalize software costs when both management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended (referred to as the "probable-to-complete recognition threshold"). In evaluating the probable-to complete recognition threshold, an entity is required to consider whether there is significant uncertainty associated with the development activities of the software. The ASU is effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. We are currently evaluating the new guidance to determine the impact it may have on our consolidated financial statements.

In September 2025, the FASB issued ASU 2025-07, *Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract.* The ASU clarifies derivative scope exceptions for certain contracts with underlings that are based on the operations or activities of one of the parties to the contract. The ASU also clarifies the applicability of ASC Topic 606, Revenue from Contracts with Customers, and its interaction with other ASC Topics (including ASC Topic 815 on derivatives and hedging and ASC Topic 321 on equity securities), in the accounting for share-based noncash consideration (such as warrants or shares) received from a customer for the transfer of goods or services. The ASU is effective for annual periods beginning after December 15, 2026 and interim periods within those periods. We are currently evaluating the new guidance to determine the impact it may have on our consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, *Interim Reporting (Topic 270) Narrow- Scope Improvements*. The amendments in this ASU do not change the fundamental nature of interim reporting or expand or reduce current interim disclosure. The amendments in this ASU clarify the guidance in ASC Topic 270 by providing a comprehensive list of required interim disclosures and codifying a disclosure principle that requires us to disclose events and changes that occur after the end of the most recent annual reporting period that have a material impact on its consolidated financial statements. The amendments in this ASU are effective for interim periods within annual reporting periods beginning after December 15, 2027. We are currently evaluating the new guidance to determine the impact it may have on our consolidated financial statements.

In December 2025, the FASB issued ASU 2025-12, *Codification Improvements. (Topic 815)* The amendments in this ASU update the FASB Accounting Standards Codification for a broad range of Topics arising from technical corrections, unintended application of the Codification, clarifications, and other minor improvements. The amendments in this ASU are effective for all entities for annual periods beginning after December 15, 2026, and interim periods within those annual periods. We are currently evaluating the new guidance to determine the impact it may have on our consolidated financial statements.

**Critical Accounting Policies and Estimates** 

Our accounting policies are essential to understanding and interpreting the financial results reported in our condensed consolidated financial statements. Our industry is subject to a number of highly complex accounting rules and requirements, many of which place heavy burdens on management to make judgments relating to our business. The significant accounting policies used in the preparation of our condensed consolidated financial statements are summarized in note 3 to our consolidated financial statements and notes thereto found in our Annual Report on Form 10-K for the year ended December 31, 2025. Certain of those policies are considered to be particularly important to the presentation of our financial results because they require us to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures. We base our assumptions, estimates, and judgments on historical experience, current trends, and other factors that management believes to be relevant at the time our consolidated financial statements are prepared. On a regular basis, management reviews the accounting policies, assumptions, estimates, and judgments to ensure that our financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. During the three months ended March 31, 2026, there were no material changes to matters discussed under the heading "Critical Accounting Policies and Estimates" in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 72

------

[**Table of Contents**](#toc)

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK** 

**All amounts in this section are in thousands unless otherwise noted.** 

***Market Risk***

Market risk is the risk of economic loss arising from the adverse impact of market changes to the market value of our trading and investment positions. Market risk is inherent to both derivative and non-derivative financial instruments, and, accordingly, the scope of our market risk management procedures extends beyond derivatives to include all market risk sensitive financial instruments. For the purpose of analyzing the components of market risk, we have broken out our investment portfolio into three broad categories, plus debt, as described below.

*Fixed Income Securities*: We hold, from time to time, the following securities: U.S. Treasury securities, U.S. government agency MBS, U.S. government agency debt securities, CMOs, non-government MBS, corporate bonds, non-redeemable and redeemable preferred stock, municipal bonds, SBA loans, certificates of deposits, residential mortgage loans, whole loans, and unconsolidated investments in the middle and senior tiers of securitization entities and TruPS. We attempt to mitigate our exposure to market risk by entering into economic hedging transactions, which may include TBAs and other forward agency MBS contracts. The fixed income category can be broadly broken down into two subcategories: fixed rate and floating rate.

Floating rate securities are not particularly sensitive to interest rate risk. Because they generally accrue income at a variable rate, the movement in interest rates typically does not impact their fair value. Fluctuations in their current income due to variations in interest rates are generally not material to us. Floating rate fixed income securities are subject to other market risks such as default risk of the underlying issuer, changes in issuer's credit spreads, prepayment rates, investor demand and supply of securities within a particular asset class or industry class of the ultimate obligor. The sensitivity to any individual market risk can be difficult to quantify.

The fair value of fixed rate securities is sensitive to changes in interest rates. However, fixed rate securities that have low credit ratings or represent junior interests in securitizations are not particularly interest rate sensitive. In general, when we acquire interest rate sensitive securities, we enter into an offsetting short position for a similar fixed rate security. Alternatively, we may enter into other interest rate hedging arrangements such as interest rate swaps or Eurodollar futures. We measure our net interest rate sensitivity by determining how the fair value of our net interest rate sensitive assets would change as a result of a 100 basis point ("bps") adverse shift across the entire yield curve. Based on this analysis, as of March 31, 2026, we would incur a loss of $1,368 if the yield curve rises 100 bps across all maturities and a gain of $1,359 if the yield curve falls 100 bps across all maturities.

*Equity Securities*: We hold equity interests in both public and private entities. These investments are subject to equity price risk. Equity price risk results from changes in the level or volatility of underlying equity prices, which affect the value of equity securities or instruments that in turn derive their value from a particular stock. We also hold a significant amount of equity in public companies that recently completed a merger with a SPAC that we sponsored or invested in. A significant portion of the equity we hold in these types of entities are subject to sale restrictions. We attempt to reduce the risk of loss inherent in our inventory of equity securities by closely monitoring those security positions or in some cases entering into derivatives trades to hedge this exposure. We also have had equity investments in entities where the investment is denominated in a foreign currency, or where the investment is denominated in U.S. Dollars but the investee primarily makes investments in foreign currencies. The fair values of these investments are subject to change as the spot foreign exchange rate between these currencies and the U.S. Dollar (our functional currency) fluctuates. We may, from time to time, enter into foreign exchange rate derivatives to hedge all or a portion of this risk. We measure our net equity price sensitivity and foreign currency sensitivity by determining how the net fair value of our equity price sensitive and foreign exchange sensitive assets would change as a result of a 10% adverse change in equity prices or foreign exchange rates. Based on this analysis, as of March 31, 2026, our equity price sensitivity was $5,424 and our foreign exchange currency sensitivity was $0.

*Other Securities:* These investments are primarily made up of residual interests in securitization entities. The fair value of these investments will fluctuate over time based on a number of factors including, but not limited to, liquidity of the investment type, the credit performance of the individual assets and issuers within the securitization entity, the asset class of the securitization entity and the relative supply of and demand for investments within that asset class, credit spreads in general, the transparency of valuation of the assets and liabilities of the securitization entity, and investors' view of the accuracy of ratings prepared by the independent rating agencies. The sensitivity to any individual market risk cannot be quantified.

*Debt*: In addition to the risks noted above, we incur interest rate risk related to our debt obligations. We have debt that accrues interest at either variable rates or fixed rates. As of March 31, 2026, a 100 bps change in the appropriate variable base rate would result in a change in our annual cash paid for interest in the amount of $481. A 100 bps adverse change in the market yield to maturity would result in an increase in the fair value of the debt in the amount of $2,065 as of March 31, 2026.

***Counterparty Risk and Settlement Risk***

We are subject to counterparty risk primarily in two areas: (i) our collateralized securities transactions described in note 10 to our consolidated financial statements included in Item 1 in this Quarterly Report on Form 10-Q and (ii) our TBA and other forward agency MBS activities described in note 9 to our consolidated financial statements included in Item 1 in this Quarterly Report on Form 10-Q. With respect to the gestation repo financing activities, our risk is that the counterparty does not fulfill its obligation to repurchase the underlying security when it is due. In this case, we would typically liquidate the underlying security, which may result in a loss if the security has declined in value in relation to the balance due from the counterparty under the reverse repurchase agreement.

With respect to our TBA and other forward agency MBS activities, our risk is that the counterparty does not settle the TBA trade on the scheduled settlement date. In this case, we would have to execute the trade, which may result in a loss based on market movement in the value of the underlying trade between its initial trade date and its settlement date (which in the case of TBAs can be as long as 90 days). If we were to incur a loss under either of these activities, we have recourse to the counterparty pursuant to the underlying agreements.

Finally, we have general settlement risk in all of our regular way fixed income and equity trading activities. If a counterparty fails to settle a trade, we may incur a loss in closing out the position and would be forced to try to recover this loss from the counterparty. If the counterparty has become insolvent or does not have sufficient liquid assets to reimburse us for the loss, we may not get reimbursed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 73

------

[**Table of Contents**](#toc)

***How we manage these risks***

*Market Risk* 

We seek to manage our market risk by utilizing our underwriting and credit analysis processes that are performed in advance of acquiring any investment. In addition, we continually monitor our investments on a daily basis. We perform an in-depth monthly analysis on all our investments and our risk committee meets on a bi-weekly basis to review specific issues within our portfolio and to make recommendations for dealing with these issues. In addition, our broker-dealer has an assigned chief risk officer that reviews the firm's positions and trading activities on a daily basis.

*Counterparty Risk and Settlement Risk*

We seek to manage our counterparty risk primarily through two processes. First, we perform a credit assessment of each counterparty to ensure the counterparty has sufficient equity, liquidity, and profitability to support the level of trading or lending we plan to do with them. Second, we may require counterparties to post cash or other liquid collateral ("margin") to support changes in the market value of the underlying securities or trades on an ongoing basis.

In the case of collateralized securities financing transactions, we will generally lend less than the market value of the underlying security initially. The difference between the amount lent and the value of the security is referred to as the haircut. We will seek to maintain this haircut while the loan is outstanding. If the value of the security declines, we will require the counterparty to post margin to offset this decline. If the counterparty fails to post margin, we will sell the underlying security. The haircut serves as a buffer against market movements to prevent or minimize a loss.

In the case of TBA and other forward agency MBS activities, we sometimes require counterparties to post margin with us when the market value of the underlying TBA trade declines. If the counterparty fails to post margin, we will close out the underlying trade. In the case of TBA and other forward agency MBS activities, we will sometimes obtain initial margin or a cash deposit from the counterparty, which serves a purpose similar to the haircut as an additional buffer against losses. However, some of our TBA and other forward agency MBS activities are done without initial margin or cash deposits.

***Risks Related to our Gestation Repo Business***

We have entered into repurchase and reverse repurchase agreements as part of our gestation repo business. In general, we will lend money to a counterparty after obtaining collateral securities from that counterparty pursuant to a reverse repurchase agreement. We will borrow money from another counterparty using those same collateral securities pursuant to a repurchase agreement. We seek to earn net interest income on these matched transactions.

In our gestation repo business, we will generally ensure that the maturity dates of our reverse repurchase agreements match the maturity dates of the matched repurchase agreements. Because our maturities are matched, we can pass along any changes in funding terms imposed upon us by our repurchase agreement counterparty to our reverse repurchase agreement counterparty. Therefore, we are not exposed to a great deal of interest rate or funding risk. The main risk we are exposed to is credit risk. We manage this risk by obtaining collateral in excess of the contractual repo balance and performing credit reviews of counterparties and updating them on a routine basis.

**ITEM 4. CONTROLS AND PROCEDURES** 

**Evaluation of Disclosure Controls and Procedures** 

We have established and maintain disclosure controls and procedures that are designed to ensure that material information relating to the Company (and its consolidated subsidiaries) required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including our chief executive officer and chief financial officer, who certify our financial reports, and to other members of senior management and the Company's board of directors. Under the supervision and with the participation of our chief executive officer and chief financial officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act) as of March 31, 2026. Based on that evaluation, the chief executive officer and the chief financial officer concluded that our disclosure controls and procedures were effective at March 31, 2026.

**Changes in Internal Control Over Financial Reporting** 

There was no change in our internal control over financial reporting during the quarter ended March 31, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 74

------

[**Table of Contents**](#toc)

**PART II. OTHER INFORMATION**

**Item 1. Legal Proceedings** 

Incorporated by reference to the headings titled "Commitments and Contingencies" in note 20 to the consolidated financial statements included in Item 1 in this Quarterly Report on Form 10-Q.

**Item 1A. Risk Factors** 

In addition to the information set forth in this Quarterly Report on Form 10-Q, you should also carefully review and consider the risk factors contained in our other reports and periodic filings with the SEC, including without limitation the risk factors contained under the caption "Item 1A—Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025, that could materially and adversely affect our business, financial condition, and results of operations. The risk factors discussed in that Form 10-K do not identify all risks that we face because our business operations could also be affected by additional factors that are not presently known to us or that we currently consider to be immaterial to our operations. There have been no material changes in the significant factors that may affect our business and operations as described in "Item 1A—Risk Factors" of the Annual Report on 10-K for the year ended December 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 75

------

[**Table of Contents**](#toc)

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds** 

Effective January 1, 2010, the Company ceased to qualify as a REIT and, therefore, is not required to make any dividends or other distributions to its stockholders. However, the Company's board of directors has the power to decide to increase, reduce, or eliminate dividends in the future. The Company's board of directors' decision will depend on a variety of factors, including business, financial, and regulatory considerations as well as any limitations under Maryland law or imposed by any agreements governing indebtedness of the Company. There can be no assurances that such dividends will be maintained or increased and, if maintained or increased, will not subsequently be discontinued.

Certain subsidiaries of the Operating LLC have restrictions on the withdrawal of capital and otherwise in making distributions and loans. Cohen Securities is subject to net capital restrictions imposed by the SEC and FINRA that require certain minimum levels of net capital to remain in this subsidiary. In addition, these restrictions could potentially impose notice requirements or limit our ability to withdraw capital above the required minimum amounts (excess capital) whether through distribution or loan. CCFESA is regulated by the ACPR in France and must maintain certain minimum levels of capital. See note 18 to our consolidated financial statements included in Item 1 in this Quarterly Report on Form 10-Q.

*Issuer Purchases of Equity Securities*

None

**Item 3. Defaults Upon Senior Securities**

None

**Item 4. Mine Safety Disclosures**

None

**Item *5.* Other Information**

***<u>Rule *10b5*-*1* Trading Plans</u>***

Our executive officers and directors *may* from time to time enter into plans or arrangements for the purchase or sale of our Common Stock that are intended to satisfy the affirmative defense conditions of Rule *10b5*-*1*(c) under the Exchange Act. During the *three* months ended *March 31, 2026*, *none* of our directors or officers adopted, modified or terminated any contract, instruction, or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or any "non-Rule 10b5-1 trading arrangement." (as defined in Item *408*(c) of Regulation S-K).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 76

------

[**Table of Contents**](#toc)

**Item 6. Exhibits** 

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 10.1 | [Equity Distribution Agreement, dated February 20, 2026, by and between Cohen & Company Inc. and Northland Capital Markets (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed by the Registrant with the SEC on February 20, 2026).](http://www.sec.gov/Archives/edgar/data/1270436/000110465926018133/tm266883d2_ex10-1.htm) |
| 10.2 | [Cohen & Company, LLC Second Amended and Restated Limited Liability Company Agreement, dated March 6, 2026 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed by the Registrant with the SEC on March 6, 2026).](http://www.sec.gov/Archives/edgar/data/1270436/000110465926024696/tm268153d1_ex10-1.htm) |
| 31.1 | [Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended.\*](ex_907794.htm) |
| 31.2 | [Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended.\*](ex_907795.htm) |
| 32.1 | [Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended.\*\*](ex_907796.htm) |
| 32.2 | [Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended.\*\*](ex_907797.htm) |
| 101 | Interactive data files pursuant to Rule 405 of Regulation S-T formatted inline XBRL: (i) the Consolidated Balance Sheets at March 31, 2026 and December 31, 2025, (ii) the Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Three Months Ended March 31, 2026 and 2025, (iii) the Consolidated Statements of Changes in Equity for the Three and Three Months Ended March 31, 2026 and 2025, (iv) the Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025, and (v) Notes to Consolidated Financial Statements.\*\* |
| 104 | Cover Page Interactive Data File (formatted in inline XBRL and contained in Exhibit 101) |
| \* | Filed herewith. |
| \*\* | Furnished herewith. |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 77

------

[**Table of Contents**](#toc)

**<u>SIGNATURES</u>**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | Cohen & Company Inc. | Cohen & Company Inc. |
|  | By: | /s/ LESTER R. BRAFMAN |
|  |  | **Lester R. Brafman** |
| Date: May 4, 2026 |  | **Chief Executive Officer** |
|  | Cohen & Company Inc. | Cohen & Company Inc. |
|  | By: | /s/ JOSEPH W. POOLER, JR. |
|  |  | **Joseph W. Pooler, Jr.** |
| Date: May 4, 2026 |  | **Executive Vice President, Chief Financial Officer, and Treasurer** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 78

## Exhibit 31.1

**Exhibit 31.1**

SECTION 302 CEO CERTIFICATION

I, Lester R. Brafman, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q of Cohen & Company Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: May 4, 2026 | Signed: | /s/ LESTER R. BRAFMAN |
|  | Name: | Lester R. Brafman |
|  | Title: | Chief Executive Officer |

---

## Exhibit 31.2

**Exhibit 31.2** 

SECTION 302 CFO CERTIFICATION

I, Joseph W. Pooler, Jr., certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q of Cohen & Company Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: May 4, 2026 | Signed: | /s/ JOSEPH W. POOLER, JR. |
|  | Name: | Joseph W. Pooler, Jr. |
|  | Title: | Executive Vice President, Chief Financial Officer and Treasurer |

---

## Exhibit 32.1

**Exhibit 32.1** 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Cohen & Company Inc (the "Company") for the three months ended March 31, 2026, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Lester R. Brafman, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: May 4, 2026 | Signed: | /s/ LESTER R. BRAFMAN |
|  | Name: | Lester R. Brafman |
|  | Title: | Chief Executive Officer |

---

## Exhibit 32.2

**Exhibit 32.2** 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Cohen & Company Inc (the "Company") for the three months ended March 31, 2026, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Joseph W. Pooler, Jr., Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: May 4, 2025 | Signed: | /s/ JOSEPH W. POOLER, JR. |
|  | Name: | Joseph W. Pooler, Jr. |
|  | Title: | Executive Vice President, Chief Financial Officer and Treasurer |

---